What is the definition of aggregate supply?

The definition of aggregate supply is the total supply of goods that firms plan to sell at various price levels. This concept reflects the overall output of an economy and indicates how much production firms are willing to supply at different price levels within a given time period.

Aggregate supply is influenced by several factors, including production capacity, labor availability, technology, and resource costs. As prices change, firms adjust their output levels; thus, understanding aggregate supply is crucial for analyzing economic performance and policy effects.

The other choices address different aspects of economic activity, but they do not accurately capture the essence of aggregate supply. For instance, total goods and services produced in a country refer more broadly to overall economic output, while total demand focuses on purchase intentions rather than what firms plan to sell. Total revenue pertains to the income generated from sales rather than the volume of goods supplied at varying prices. Therefore, the correct understanding of aggregate supply is vital for grasping how the economy functions in terms of production and pricing strategies.