The short-run aggregate supply curve will decrease if:

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The short-run aggregate supply curve can shift left (decrease) as a result of:

Increases in Input or Commodity Costs:

           - Ex 1: If nominal wages increase, businesses will have to pay workers greater amounts of money, meaning that employing workers is more expensive.

           - Ex 2: If the price of commodities go up (such as steel, oil, etc.), businesses will have to pay more to produce goods, decreasing supply.

Increase in government regulations:

            - Ex 1: If government regulations are increased for limiting fossil fuel usage, many industries will experience a decrease in productivity, shifting the supply curve left.

Increase in business taxes:

             - Ex 1: If the government increases taxes on businesses, businesses will have to divert money that could have been spent on materials, labor, etc. and pay government taxes. This results in a decrease in aggregate supply.

There are many other reasons for the SRAS curve to shift, but these are some of the main ones.

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