What is a primary factor that shifts the aggregate supply curve?

The aggregate supply curve illustrates the total quantity of goods and services that producers in an economy are willing and able to sell at various price levels. One primary factor that can shift this curve is the cost of inputs and resources. When the costs associated with production inputs, such as labor, raw materials, and energy, change, it directly affects the overall cost of production for businesses.

For instance, if the prices of crucial raw materials rise significantly, production becomes more expensive, leading firms to supply less at any given price level. This scenario causes the aggregate supply curve to shift to the left, indicating a decrease in total supply. Conversely, if input costs decline—such as a decrease in wages or the cost of raw materials—production becomes cheaper, allowing businesses to supply more goods at each price level, which would shift the aggregate supply curve to the right.

While factors like changes in consumer preferences, the growth of the labor force, and government tariffs can influence economic conditions, they are not direct determinants of the shifts in the aggregate supply curve in the same way that input costs are. Changes in consumer preferences typically affect aggregate demand rather than supply, while the growth of the labor force influences supply indirectly through potential productivity changes rather than immediate input costs. Government tariffs can