Unit 1 Taxes and subsidies
A subsidy is a financial grant or reward given by the government which reduces cost of production and firms can supply more at a lower price.
Indirect taxes: are taxes which are levied (charged) on expenditure. Therefore the more we buy of products which carry an indirect tax, the more tax we pay. These cause the supply curve to shift left, they increase cost of production. examples - gaming tax,VAT, import/export duties.