In increasing cost industries, the entry of new firms leads to higher average production costs due to the scarcity of resources, which in turn causes the _____ to shift left as firms exit the market.

In increasing cost industries, when new firms enter the market, they compete for limited resources, such as raw materials and labor. This competition drives up the costs of these resources, leading to higher average production costs for all firms. As a result, some firms may find it too expensive to continue operating and decide to exit the market. When firms leave, the overall supply in the market decreases, which causes the supply curve to shift to the left. For example, if many coffee shops open in a small town, the price of coffee beans might rise due to higher demand, making it harder for some shops to stay profitable.