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, including wages, raw materials, and energy prices. 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 production costs for many companies will also rise, leading them to reduce their output. Conversely, if production costs decrease, businesses can produce more, shifting aggregate supply to the right. This relationship shows how changes in costs can directly impact the total amount of goods and services produced in the economy in the short run.