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1.2.2 Supply - Coggle Diagram
1.2.2 Supply
Factors affecting supply
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Indirect taxes
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VAT and excise duties, such as those levied on petrol and tobacco, are examples of indirect taxes
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Goverment subsidies
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If the government grants a subsidy on a good the effect is to increase its supply as they can reduce production costs
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Government
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If interest rates increased, this could increase business costs for firms with debt
If the government passes laws to make a particular market more competitive then the supply in that market is likely to increase as new entrants enter the market
Price of related goods
In some markets, supply can be affected by price changes of related goods
Key Terms
Supply - The amount of a product that suppliers make available to the market at any given price in a given period of time
Supply Curve - A line drawn on a graph that shows how much of a good sellers are willing to supply at different prices
Subsidy - A grant given to producers, usually to encourage production of a certain good
Supply
The higher the price of a particular good or service, the more that will be offered to the market