Concept:An increase in subsidies reduces production costs, which encourages producers to supply more at every given price.
Explanation:A rise in subsidies on raw materials lowers the total cost of producing each unit of the product.
Because production becomes cheaper, producers can earn a higher profit margin at the same selling price.
This higher profit incentive leads producers to offer a larger quantity for sale in the market.
As a result, the entire market supply curve shifts to the right, representing an increase in market supply.
Option A is not correct because a rise in product price only causes a movement along the supply curve, increasing quantity supplied rather than supply itself.
Options B and C are not correct because higher prices of factors of production and higher taxes on raw materials both increase production costs, which decrease supply.
Answer:D. Subsidies on raw materials.