Explain why Supply and Demand Curves Shift and how Shifts Cause Changes in the Market Price

Subsidies and taxation can shift the supply curve. Subsidies and taxation effectively decrease or increase the profits of production by manipulating the money firms receive by a given amount:
We see that as taxation for a product increases as in diagram 1 the demand for that product increases as a consequence, the supply curve shifts to the left from S1 to S2. An opposite effect is obtained when a subsidy is placed on the product, increasing the profit from production.
The number of firms in an industry can alter the supply curve. As more firms enter the industry, more output of a particular product is produced. This shifts the supply curve to the right. Thus the advantages a particular industry may hold in terms of price, for example a shift to the right of the supply curve caused by government subsidies, soon even out with the price lowering again by the entry of new firms into an industry.
Expectations of economic conditions can vary supply also: if businesses believe that a recession is imminent, they are less likely to invest and thus less is produced, even if a reasonable price is commanded for a certain good. If the price of a good is expected to lower, firms become desperate to sell their stocks before prices do fall raising the quantity supplied at a certain price.
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