Anything that increases costs of production will tend to increase marginal cost and thus reduce the supply. For example, as wages rise, the supply of goods and services is reduced, because wages are the input price of labor. Labor accounts for about two- thirds of all input costs, and thus wage increases create supply reductions (a higher price is necessary to provide the same quantity) for most goods and services. Costs of materials of course increase the price of goods using those materials. For example, the most important input into the manufacture of gasoline is crude oil,.
