The aggregate supply curve is shifted to the left ( inward) by
A)an increase in the price of any input to the production process.
B)a decrease in the price of any input to the production process.
C)the price of any input staying the same.
D)None of the above is correct.

Question

Quizplus · Accepted Answer

An increase in the price of any input to the production process would lead to an increase in the cost of production, causing a decrease in the quantity that firms are willing to supply at each price level. This shift would cause the aggregate supply curve to shift to the left (inward). Option B is incorrect because a decrease in the price of any input would decrease the cost of production and increase the quantity firms are willing to supply at each price level, leading to a shift to the right (outward) of the aggregate supply curve. Option C is incorrect because no change in the input prices would not cause any shift in the aggregate supply curve. Option D is incorrect because option A is the correct answer.

The Aggregate Supply Curve Is Shifted to the Left