The total productive capacity of an economy. It is equal to the full employment level of real output and is vertical at the point of full employment.
The LRAS curve illustrates that in the long-run unless there is a change in the size or productivity of the factors of production employed, supply will always exist at the full employment level and will not vary with price, as the economy is at full capacity. The diagram below highlights the typical shape of an LRAS curve.
