Loans, credit & investment

If the government increases the taxes on the sellers of a product, the result will be the same as any other increase in the cost of doing business. The added tax that sellers have to pay will reduce their willingness to sell the product at any given price. Each unit must now be sold for a price that covers not only the opportunity cost of production, but also the tax. For example, the Superfund law, passed by Congress in 1980, placed a special tax on petroleum producers based on their output. That raised the cost of producing petroleum products, decreasing the amount producers were willing to supply.
The accompanying Thumbnail Sketch summarizes the major factors that change supply- a shift of the entire supply curve; and quantity supplied- a movement along the supply curve.

How will an increase in the price of a resource, such as wages of workers or the materials used to produce a product, affect the supply of a good? Higher resource prices will increase the cost of production, reducing the profitability of firms supplying the good. The higher cost will induce firms to reduce their output. With time, some may even be driven out of business. Higher resource prices will reduce the supply of the good, causing a shift to the left in the supply curve from S, to S,. Alternatively, a reduction in the price of a resource used to produce a good will cause an increase in supply- a rightward shift in the supply curve- as firms expand output in response to the lower costs and increased profitability of supplying the good.