Learning Path
Question & Answer1
Understand Question2
Review Options3
Learn Explanation4
Explore TopicChoose the Best Answer
A
Increase in labor costs
B
Technological advancements in production
C
Rise in raw material prices
D
Government subsidies for production
E
Decrease in production capacity due to equipment failure
Understanding the Answer
Let's break down why this is correct
Answer
A leftward shift in the supply curve means that suppliers are willing to produce less of a product at every price level. This can happen for several reasons, such as an increase in production costs, which makes it harder for producers to supply the same quantity. For example, if the cost of raw materials rises significantly, manufacturers may cut back on production because it’s too expensive to make the same amount of goods. Additionally, if new regulations are introduced that make it more difficult or costly to produce a product, this can also lead to a decrease in supply. Overall, any factor that increases the cost or difficulty of production can cause the supply curve to shift left.
Detailed Explanation
Other options are incorrect because Higher labor costs mean it costs more to make products; New technology often helps make products faster or cheaper.
Key Concepts
Supply and Demand Interactions
Market Equilibrium
Production Costs
Topic
Supply and Demand Interactions
Difficulty
easy level question
Cognitive Level
understand
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