The short-run aggregate supply (SRAS) curve is characterized by an upward slope, which can be explained through three key theories: the sticky wage theory, the sticky price theory, and the misperceptions theory. Each of these theories provides insight into why the quantity of goods supplied increases as the price level rises.

The sticky wage theory posits that wages do not adjust quickly to changes in the price level. In an economic boom, while prices for goods and services increase, wages tend to remain relatively fixed. For instance, if a coffee shop raises its prices but does not increase employee wages, the business experiences higher profit margins since its costs remain stable while revenue increases. This incentivizes businesses to supply more goods as they capitalize on the increased profit potential.

In contrast, the sticky price theory suggests that some prices do not rise as quickly as the overall price level due to menu costs. These costs refer to the expenses incurred by businesses when they change their prices, such as reprinting menus in a restaurant. If a restaurant chooses to keep its prices stable while others increase theirs, it may attract more customers due to its lower prices. This increase in demand compels the restaurant to produce more, contributing to a higher quantity supplied in the economy.

The misperceptions theory indicates that businesses may misinterpret rising general price levels as a signal to increase production. When firms observe higher prices, they may mistakenly believe that their specific product prices are also rising, prompting them to boost output in response. This reaction can lead to an increase in the overall supply in the short run.

In summary, the upward slope of the short-run aggregate supply curve can be attributed to the interplay of these theories. The sticky wage theory highlights the lag in wage adjustments, the sticky price theory emphasizes the reluctance to change prices due to associated costs, and the misperceptions theory reflects a misunderstanding of price signals. Together, they illustrate how businesses respond to rising price levels by increasing the quantity of goods supplied.