Which of the following will increase per-unit costs and reduce short-run aggregate supply?

Multiple choice question.

Lower business taxes

Increased subsidies to firms

Deregulation

Higher business taxes

1 answer

The option that will increase per-unit costs and reduce short-run aggregate supply is:

Higher business taxes.

Higher taxes on businesses generally increase their costs of operation, which can lead to a decrease in short-run aggregate supply as firms may produce less output due to reduced profitability.