Which factor would shift the supply curve to the left?

Which factor would shift the supply curve to the left?

• A. Higher productivity technology.
• B. Lower input prices.
• C. Decrease in taxes.
• D. Higher input prices.

Answer: (D)

Higher input prices make producing each unit more costly, so firms are willing to supply less at every market price. This raises the cost of production and reduces overall quantity supplied, shifting the supply curve to the left (a decrease in supply). Other factors would have the opposite effect: productivity improvements lower costs and boost supply, lower input prices reduce costs and increase supply, and a tax cut lowers costs and increases supply. Each of these shifts the supply curve to the right.

Higher input prices make producing each unit more costly, so firms are willing to supply less at every market price. This raises the cost of production and reduces overall quantity supplied, shifting the supply curve to the left (a decrease in supply).

Other factors would have the opposite effect: productivity improvements lower costs and boost supply, lower input prices reduce costs and increase supply, and a tax cut lowers costs and increases supply. Each of these shifts the supply curve to the right.