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8 May, 2015 - 11:40

This intermediate range of aggregate supply represents the case of preliminary inflation (or sectoral inflation): when demand and output expand, some sectors of the economy may experience bottlenecks and require that prices increase because output cannot.

Some sectors of the economy tend to experience price and quantity changes at the same time. This would seem to be true of all the consumer goods sectors such as radios and televisions, or sport equipment.