Examples- Market Supply Shift To The Right

Question 1

Vat tax cut for the UK hospitality industry

Answer 1

VAT tax cut to 5% in 2021 reduced costs of production for these firms encouraging greater quantity and lower prices of restaurant meals

Question 2

Large subsidies on notable items such as fuel, gas and rice (India)

Answer 2

Reduce costs of production for producers who can then lower prices to consumers thus improving affordability

Question 3

Airlines

Answer 3

A greater number of airlines as the travel industry recovers past Covid has increased the number of flights and has lowered fares to certain destinations