Taxes and subsidies, as well as prices of other commodities, are determinants of supply.

Question

Quizplus · Accepted Answer

Taxes and subsidies directly affect the cost of production and can influence the willingness of suppliers to produce a good or service. Prices of other commodities can also affect the supply of a particular good or service as suppliers may shift their production towards more profitable products. Therefore, taxes, subsidies, and prices of other commodities are all determinants of supply.

Taxes and Subsidies, as Well as Prices of Other Commodities