SLOPE, LONG-RUN AGGREGATE SUPPLY CURVE: The long-run aggregate supply (LRAS) curve is a vertical line with an infinite slope, reflecting the independent relation between the price level and aggregate real production. A higher price level is associated with the same real production as a lower price level. And this real production is that produced when resources are fully employed, that is, full-employment production. Real production is unaffected by the price level because prices are flexible in the long run. Long-run price flexibility ensures that ALL markets (product, financial, and resource) are in equilibrium. See also | long-run aggregate supply curve | slope | long-run aggregate supply | price level | real production | full-employment real production | product markets | financial markets | resource markets | change in real production | change in aggregate supply | aggregate supply determinants | slope, short-run aggregate supply curve | slope, aggregate demand curve |
