Economics
Marginal Cost and Supply Curve Shifts
Quick fact
A rise in marginal cost shifts the supply curve leftward (upward), meaning producers supply less at each price. This is why a tax on a product, which increases marginal cost, reduces the quantity supplied and raises the market price.
Why this is interesting
Ever wonder why a sudden spike in the price of coffee beans leads to higher coffee prices at your favorite café? The answer lies in how a firm's marginal cost—the cost of making one more cup—shapes the entire supply curve.