Question

In order to shift the vertical supply curve to the left, which of the following would have to occur?

1) increase in productivity
2) breakdown of key market institutions
3) expansion of potential GDP
4) flexible wage and price adjustments

Answer 1

To shift the vertical supply curve to the left, a breakdown of key market institutions would have to occur.

Step-by-step explanation:

In order to shift the vertical supply curve to the left, a breakdown of key market institutions would have to occur. This is because the institutions play a crucial role in facilitating the functioning of markets and ensuring efficient allocation of resources. When these institutions break down, it can disrupt the market mechanisms and lead to a leftward shift in the supply curve.