Which factor can cause a leftward shift in the supply curve?

Study for the VirtualSC Economics Honors Exam. Utilize flashcards and multiple-choice questions, each with hints and explanations. Get prepared for your exam!

A leftward shift in the supply curve indicates a decrease in the quantity of goods that producers are willing and able to provide at various price levels. Increased production costs are one of the main reasons for this shift. When costs rise—whether due to higher prices for raw materials, increased labor costs, or other expenses—producers may find it less profitable to supply the same quantity of goods as before. Consequently, they reduce their output, leading to a decrease in overall supply at each price point, which effectively shifts the supply curve to the left. This reflects the economic principle that higher production costs shrink the supply for goods and services available in the market.

On the other hand, technological advancements, more suppliers entering the market, and government subsidies typically encourage an increase in supply, which would result in a rightward shift of the supply curve rather than a leftward shift. Therefore, those alternatives do not represent factors that would cause a reduction in supply like increased production costs do.

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