Question

What would happen if govenment uses different polices to regulate the economy. What would happen if govenment;

i. impose taxes on the commodity.
ii.provide subsides and incentives.​

Answer 1

Answer:when the gov imposes heavy taxes on the production of a particular commodity, the cost of production of that good increases and the price will remain constant. This results in reduction in profits.

Government subsidies help an industry by paying for part of the cost of the production of a good or service by offering tax credits or reimbursements or by paying for part of the cost a consumer would pay to purchase a good or service.

Step-by-step explanation: