Question

What shape is the long-nm aggregate supply curve? Why does it have this shape?

Short answer

The $LRAS$ curve (Long-Run Aggregate Supply) is totally vertical.

Step-by-step solution

Introduction of the long-nm aggregate c supply curve.

$LRAS$is vertical shape parallel to $y-axis$. It's because, in the long run, real GDP is reliant on the supply of capital, labor, raw materials, and other non-price elements.

Explanation of solution.

Potential GDP, according to neoclassical economists, is the level at which all of an economy's resources are completely used. $LRAS$ has a vertical form at the potential GDP level.

$LRAS$ may move in the long run as resources grow, but not because of price changes. $LRAS$ remains in the same position regardless of aggregate demand. As a result, a vertical straight line parallel to the pricing axis exists.