Significance of Y-axis in Aggregate Supply curve (AD-AS model)
I didn't quite well understood your question, but from what I could make of it I have answered the relation behind the formation of the Short run aggregate supply 

In the short run, nominal rigidities , and/or imperfect information, make the AS
curve positively sloped (SRAS - Short run aggregate supply)



The position of the SRAS curve is determined by the factors 
contributing to equilibrium in the labour market. In particular, an increase
in the expected price level makes workers bargain for higher wages (for
any given unemployment rate). The increase in the wage raises the actual
price that firms set. As a result, an increase in the expected price level
causes the AS curve to shift upwards

Diagrammatically , the SRAS curve should shift upwards ; 




This equation states that the deviation of the actual price level from the
expected price level, P – Pe, is proportional to the deviation of output
from its natural level, Y – Yn

If you are confused between Workers negotiation and AS fall or rise - you should read about the WS-PS model. The WS stands for wage setting, PS for price setting.