Lesson 6- Factors that may shift the supply curve

Question 1

What are other factors that affect supply and explain?

Answer 1

1.Increase in cost of production- fall in supply
2. Improvements in technology- rise in supply
3.Good Weather conditions- Rise in supply of agricultural products
4. Subsidies- Rise in supply
5. Indirect taxes- fall in supply

Question 2

What are the two indirect taxes and explain them

Answer 2

1. Specific tax- A fixed rate of tax that is imposed by the government on a good or service. Fall in supply
2. Ad valorem tax- This is a percentage tax that is imposed on the price of a good or service.