If costs increase, what happens to the aggregate supply curve?
A) It shifts rightward.
B) It shifts leftward.
C) Prices move up along the curve.
D) Prices move down along the curve.
E) There is no change.

Question

Quizplus · Accepted Answer

When costs increase, it becomes less profitable for firms to produce goods and services, leading to a decrease in aggregate supply. This causes the aggregate supply curve to shift leftward.

If Costs Increase, What Happens to the Aggregate Supply Curve