What is the difference between the aggregate supply curve in the classical model and the Keynesian one?

The theory of aggregate supply curves is largely reflected by aggregate production functions and labor market theory. There are different types of aggregate supply curves in macroeconomics in response to different assumptions about wages and prices in aggregate labor markets.

1. Aggregate supply curve in the classical model:

The classical theory of aggregate supply assumes that the labor market operates without friction, and that the labor market is cleared when wages and prices can be flexibly varied so that employment in the economy can always be maintained at full employment, and thus the output of the economy can always be maintained at the output or potential output of full employment, all other factors being equal level. Thus, in a coordinate system with the price level as the vertical coordinate and total output as the horizontal coordinate, the classical aggregate supply curve is a vertical line at the level of full employment output.

2. Aggregate supply curve in Keynes:

Keynesian theory of aggregate supply holds that in the short run, some prices, especially wages, are sticky and thus cannot adjust in time to changes in demand. Due to the stickiness of wages and prices, the short-run aggregate supply curve is not vertical. The Keynesian aggregate supply curve is a right-angled polyline in a coordinate system with prices as vertical coordinates and income as horizontal coordinates, indicating that when the economy is not at full employment, manufacturers are willing to supply any quantity of goods needed at the current price level, while once the economy reaches full employment, a continued increase in aggregate demand will only lead to a rise in prices and no further growth in output. The idea underlying the Keynesian aggregate supply curve is that, as a result of wage and price stickiness, the labor market tends not to remain at full employment, and because of the existence of unemployment, manufacturers can obtain the labor they need at the prevailing wage. Consequently their average cost of production is considered to be invariant to changes in the level of output.