Which of the following is a shifter of supply?

• A. Prices/Availability of inputs
• B. Number of Sellers
• C. Technology
• D. Government Action: Taxes & Subsidies

Answer: (D)

A shifter of supply is something that changes the entire supply curve, meaning it affects the quantity producers are willing to offer at every price, not just movement along at a single price.

Government action, like taxes and subsidies, does this directly by altering production costs and incentives. A tax raises costs, so producers supply less at each price, shifting the supply curve left. A subsidy lowers costs, encouraging more production, shifting it right. This policy-driven effect makes government action a clear and direct example of a supply shifter.

Other factors—input prices, the number of sellers, and technology—also influence supply by changing production costs or capacity, so they can shift the curve too. But taxes and subsidies are the classic, explicit levers that policymakers use to move supply.