Changes in Supply Graphs What shifts the supply? Government Subsidies: gov. payment that supports a business or market. Taxes: the gov. can reduce the supply of a good by taxing it. Excise Tax Regulation: Government Intervention in a marketplace that affects the production of a good. Technology Technology drops input costs. Robots can replace human workers Any examples? Number of Suppliers When more suppliers enter a market to produce a certain good, the market supply of that good will rise and the supply curve will shift right. Future Expectations on Price: what does the future hold? Natural Events/Disaster International Conflicts Answer Explain why a change that lowers the marginal revenue (price) changes the quantity produced in the same direction as a change that raises the marginal cost of production. Lowering marginal revenue decreases the incentive to produce. This is also the effect of raising the marginal cost. Both result in less profit for the producer.