Final answer:
The production function slopes upward due to additional units of input leading to additional output, particularly when firms face lower production costs or higher profits, encouraging them to increase supply.
Step-by-step explanation:
The production function slopes upward because additional units of input lead to additional output. This is a reflection of the fact that when firms face lower costs of production or increases in profits, they are motivated to increase output to earn more profit. In a scenario where costs of production fall, a firm will typically supply a larger quantity at any given price, which results in the supply curve shifting to the right.
An improvement in technology that reduces production costs, an improvement in product quality, or an increase in need can all cause shifts in the supply curve, reflecting changes in the supply of goods and services.
However, it's worth noting that if wages increase, leading to higher costs of production, some firms could incur economic losses and may shut down, causing the supply curve to shift to the left. This results in a higher market price and a contraction in market output.