Now suppose government reduces the rate of excise duty and raise
subsides. What is the likely to be impact of those on the market of a
product. Explain with diagram

Question

Now suppose government reduces the rate of excise duty and
raise
subsides What is the likely to be impact of those on the market of
a
product Explain with diagram

Amit Chatterjee · Accepted Answer

The reduction of excise duties and raised subsidies amount together
have positive and favourable impacts on the production of the
concerned good With these conditions, the production will be
cheaper and will be more beneficial for a producer to produce even
higher units of the good Consequently, the supply curve will shift
parallely rightwards The rise in supply will push down the price
for the good, since there will be now more units of good in the
market

Now suppose government reduces the rate of excise duty and raisesubsides. What is the likely to be impact of those on the market of aproduct. Explain with diagram

Now suppose government reduces the rate of excise duty and raise
subsides. What is the likely to be impact of those on the market of a
product. Explain with diagram