What is the primary determinant of aggregate supply in the short run?

The primary determinant of aggregate supply in the short run is the level of production costs, which includes wages, raw materials, and other inputs. When these costs increase, businesses may produce less because it becomes more expensive to make goods. For example, if the price of oil rises sharply, transportation and manufacturing costs can increase, leading companies to reduce their output. This means that even if demand stays the same, the overall supply of goods in the economy can decrease due to higher costs. Therefore, understanding how production costs affect supply is key to analyzing short-term economic changes.