the government provide subsidies on the production of cotton . explain its effect using diagram on the supply of cotton
The government providing subsidies on the production of cotton means an effective fall in the costs of production. To supply any given quantity of cotton, the firm will now be willing to receive a lower price, implying a downward shift of the supply curve. Alternatively, at any given price, the firm will now supply greater quantity of cotton due to rise in profit margin, implying a rightward shift in supply curve.