There are generally three forms of aggregate supply (AS). They are:

Short run aggregate supply (SRAS) - Within the time frame during which firms can change the amount of labor used but not capital (such as building new factories). This form demonstrates what happens to the economy under the most slack, when resources are underused. Upward shifts in SRAS generally increase output (y) but don't increase price (P). The SRAS curve is nearly perfectly horizontal. The concept is that wages (price of labor) don't change over the short run.

Long run aggregate supply (LRAS) - Over the long run, only capital, labor, and technology affect the LRAS in the macroeconomic model because at this point everything in the economy is assumed to be used optimally. In most situations, the LRAS is viewed as static because it shifts the slowest of the three. The LRAS is shown as perfectly vertical, reflecting economists' belief that changes in aggregate demand (AD) have an only temporary change on the economy's total output.

Medium run aggregate supply (MRAS) - As an interim between SRAS and LRAS, the MRAS form slopes upward and reflects when capital as well as labor can change. When graphing an aggregate supply and demand model, the MRAS is generally graphed after aggregate demand (AD), SRAS, and LRAS have been graphed, and then placed so that the equilibria occur at the same point. The MRAS curve is affected by capital, labor, technology, and wage rate.

In this particular instance, an increase in AD causes a temporary increase in output and permanent increase in price.

In a standard aggregate supply demand model, the output (y) is the x axis and price (P) is the y axis. An increase in aggregate demand shifts the AD curve rightward, bringing the equilibrium point horizontally along the SRAS until it reaches the new AD. This point is the short run equilibrium.

There is no one single MRAS curve; rather, it comprises an infinite number of curves that progress from the SRAS curve to the LRAS curve. We can create MRAS curves for showing things more clearly. Sometimes, we skip the SRAS equilibrium altogether and go directly along an MRAS curve; the new equilibrium is where the AD and MRAS curve intersect: the medium-run equilibrium.

Finally, the long run equilibrium is at the intersection of the AD and LRAS curves. Generally, an arrow is used to indicate the progression of the equilibrium from short-run, to medium-run, to long-run positions.