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An improvement in technology of production methods implies greater production with the same units of inputs. Hence, a technical advancement will improve the production method of tires and will result in a greater supply of auto tires in the market.

The greater the number of sellers, the greater will be the supply of a good in the market. Hence, if sellers of auto tires decrease in number, the supply of auto tires will also decline.

Inputs are used to produce a good. If there is a price rise of one of the inputs, the cost of producing that good will increase, and the profits of the producers will decrease, which will reduce the supply. Rubber is an input used in the production of auto tires. Hence, if the rubber price rises, the cost of producing tires will increase, and the supply of auto tires will decrease.

If a seller expects that the price of his produced goods will fall in the future, he will try to sell as many units of the good as possible to take advantage of the current higher relative prices. Thus, the supply of tires will be encouraged to increase with the expectation of lower prices in the future.

If the price of other types of tires like those used in semi-trucks falls, the seller will be encouraged to shift the production resources to a more profitable option. Since the auto tires have a relatively higher price, the sellers will produce and sell more auto tires.

A per-unit tax will increase the seller鈥檚 costs, thus discouraging the supply of auto tires. A 50-cent-per-unit subsidy reduces the seller鈥檚 cost, and therefore, will encourage the supply of auto tires. Thus, taxes and subsidies act as the price of input that influences the production decision of the seller.