Taxation, Subsidy and Output Levels of Firms

Through a game theory model,the inter-relationship among taxation,government subsidy for cousin and the output levels in business firms is investigated.It is shown that,for different values taken by the subsidy factor in its parameter space,there exist the types of change pattern for the outputs levels when the rate of the sales tax is increased.Moreover,the three types of change pattern can be mutually transformder certain conditions.The output levels in business firm can be controlled by changing.the value of the government's subsidy factor for consumers and adjusting the rate of the sales tax to achieve the sobal-economic goal of a government.