The aggregate supply is a measure of how much goods or services a company is able to supply to the market. This isn’t the same as how much they sell, they could for example produce 100 units a week but only sell 60 of them, in this example the aggregate supply is 100 units. You could consider aggregate supply to be potential sales (as opposed to actual sales).
Usually, if productivity rises then aggregate supply will also rise. However, productivity isn’t only a measure of how much is produced, it could also measure how effective the process is.
For example, 50 staff producing 100 units per week = aggregate supply of 100 units. Reduce the staff to 40 and still produce 100 units means that productivity has increased (less staff = less costs) but aggregate supply is unchanged.
All other things being equal (same number of staff, same overheads and costs etc) then a rise in productivity means a rise in aggregate supply.
Sounds like Economics homework.
If productivity increases, profit per widget increases and the supply curve moves up: more widgets are produced at any price.
if workers are more productive, then they are able to produce more goods than less productive workers. or, if machinery is more effective, then more goods can be produced. both these factors will increase the supply
working aggregates me
