Question

what is the effect on the supply of the good a.) when Government Imposes A Tax On the production of goods b.) when government grant subsidies​. Explain

Answer 1

Answer:

a)Market supply refers to the total of quantities supplied by all the firms in the market at different price levels. If, government imposes a tax on the production of a good then, this implies that the cost of production rises. Consequently, the firm will supply lesser units of output.

b)When government subsidies are implemented to the supplier, an industry is able to allow its producers to produce more goods and services. This increases the overall supply of that good or service, which increases the quantity demanded of that good or service and lowers the overall price of the good or service.