alleryStart learning →Which change shifts a supply curve to the left?
AA rise in the prices of the resources used in production
BAn increase in the number of suppliers in the market
CA new technology that lowers the cost of production
DA reduction in the taxes charged on each unit produced
Answer & Solution
Correct answer: A. A rise in the prices of the resources used in production
1. Supply shifts left when producing each unit becomes less rewarding.
2. If the price of resources such as labor or fabric goes up, the firm earns a smaller profit on each unit.
3. The amount supplied then decreases at every price, which is a leftward shift.
4. More suppliers entering the market places more goods on offer at every price, shifting supply right.
5. Cost-lowering technology and lower unit taxes both raise profit per unit, so both shift supply right as well.
_Source: OpenStax Introduction to Business (CC BY 4.0), Ch 1 "Understanding Economic Systems and Business", section 1.6 Microeconomics: Zeroing in on Businesses and Consumers_
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