What would cause a leftward shift in the short-run aggregate supply curve?

A leftward shift in the short-run aggregate supply curve indicates a decrease in the quantity of goods and services that firms are willing to produce at any given price level. This movement can occur due to factors that increase production costs for firms.

Higher wages or raw material prices are significant factors that can drive this leftward shift. When wages increase, labor becomes more expensive for companies, reducing their profit margins. Similarly, if the prices of raw materials rise, the cost of production escalates, making it less feasible for firms to maintain the same level of output. As a result, firms may produce less at a given price, reflecting a reduction in short-run aggregate supply.

In contrast, lower production costs or increased worker productivity would typically increase supply, while a decline in consumer demand would affect aggregate demand rather than aggregate supply directly.