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What are the effects of subsidies and government taxes on the supply and demand of the...

What are the effects of subsidies and government taxes on the supply and demand of the shipping/freight industry? Explain

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Answer #1

If there are subsidies on the industry, what happens is that they could then conduct business at a lower price as a result of which, the supply of the shipping freight services increase and this can result in the shift of supply curve to the right as a result of which the equilibrium quantity increases and Equilibrium price decreases on the whole.

If there are taxes, on the industry, it would be more expensive to conduct business as a result of which, you can understand that the cost of conducting business increases as a result of which the supply decreases a d the supply cuvre shifts to the right with which the equilibrium price and quantity decreases on the whole.

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