If a significant increase in labor costs leads to a leftward shift in the supply curve, what is the most likely underlying cause of the increased market prices?

When labor costs increase significantly, it becomes more expensive for companies to produce goods. This means that producers are willing to supply less at each price level, leading to a leftward shift in the supply curve. As the supply decreases, the available quantity of goods in the market drops, which can create a shortage if demand remains the same. When there is a shortage, prices tend to rise because consumers compete to buy the limited goods available. For example, if a bakery faces higher wages for its workers, it might reduce the number of loaves of bread it makes, causing bread prices to go up due to fewer loaves being available for customers.