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Problem:

in my course notes it's mentioned that AS is only affected by costs in the short run but not in the long run which does not make sense because if cost of production increase suppliers cannot continue producing at potential output

My assumption:

the only assumption I could come up with is that the CB can increase money supply which in turn shifts AD to the right so suppliers can continue producing at potential output

enter image description here

however, I get why the inverse of this process works (if AD increases -> prices increase -> suppliers can produce above potential output for a while -> workers ask for higher wages -> SRAS decreases -> we get back to our potential output)

is my assumption correct? if not, what's the correct explanation?

Thanks in advance (and sorry for my bad art)

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