Final answer:
The SRAS curve shifts left in the long run after an increase in aggregate demand because the economy readjusts to its potential GDP, with input costs rising and bringing down the initially increased output to a sustainable level.
Step-by-step explanation:
The short-run aggregate supply (SRAS) curve shifts to the left in the long run following an increase in aggregate demand due to the economy adjusting back to its potential GDP. When aggregate demand increases, initially, it leads to higher output and lower unemployment, with pressure for a rise in the price level (inflation). However, this short-term effect is corrected as the long-run aggregate supply (LRAS), which is vertical at the level of potential GDP, dictates the economy's real GDP. As the economy adjusts, input prices, including wages, rise due to increased demand, thus causing the SRAS to shift to the left, reducing output and increasing prices until the economy returns to its long-term equilibrium, where it is producing at full employment.