ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -When there is an increase in unit tax on the production of goods by the government, the unit cost of production will rise and consequently, the firm would supply less than before at the given price. The supply would decrease implying that the supply curve would shift to the left.

Detailed explanation-2: -An increase in factor prices should decrease the quantity suppliers will offer at any price, shifting the supply curve to the left. A reduction in factor prices increases the quantity suppliers will offer at any price, shifting the supply curve to the right.

Detailed explanation-3: -Understanding Change in Supply An increase in the change in supply shifts the supply curve to the right, while a decrease in the change in supply shifts the supply curve left. Essentially, there is an increase or decrease in the quantity supplied that is paired with a higher or lower supply price.

Detailed explanation-4: -What Factors Can Affect the Supply Curve? The supply curve can shift based on several factors including changes in production costs (e.g., raw materials and labor costs), technological progress, the level of competition and number of sellers/producers, and the regulatory & tax environment.

Detailed explanation-5: -Such taxes affect supply because it adds to the cost of production. Reduction in per unit tax levied by the government will decrease the cost of production and increase supply by the firms due to higher profit margins. In this case the supply curve will shift towards the right.