SRAS (Short-Run Aggregate Supply)
Plain definition
The upward-sloping curve showing the positive relationship between the overall price level and the quantity of real GDP supplied when some input prices, especially wages, have not fully adjusted.
In economics
SRAS slopes upward because of sticky wages and input costs: when the price level rises but wages are temporarily fixed, producers' profits rise and they expand output. Shocks to input prices (oil, raw materials) shift SRAS left or right, causing short-run fluctuations around potential GDP.
Example
A union signs a two-year wage contract, then the price level rises 5%. With wages fixed, firms' labor is now cheaper in real terms, so they hire more and increase output. That movement along the SRAS curve explains short-run booms driven by unanticipated price increases.
SRAS is confused with the long-run aggregate supply (LRAS) curve. SRAS slopes upward and shifts with input-price shocks; LRAS is vertical at potential GDP and shifts only with changes in resources, technology, or institutions. Also, SRAS is not the same as an individual firm's supply curve.