Aggregate Supply decreases when

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When wages rise, a firm's cost of production increases, which leads to a decrease in its profitability. As a result, firms may choose to produce fewer goods and services, causing a decrease in aggregate supply. Along with this, higher wages may also reduce the incentive to work, leading to a decline in worker productivity and thus further reducing aggregate supply. Options A, B, and C all tend to increase the efficiency of production or the availability of resources, which should, in turn, increase aggregate supply.

Aggregate Supply Decreases When