The supply is the production of goods and services in an economy which is ready to use by the end user.
When does supply curve shifts leftwards?
When the cost of production of a product increases due to any reason other than the change in price results in a shift of the curve towards the left.
The tax rates are increased by the government in this case which is likely to effect the cost of production and will result in a leftward shift in supply curve.
Therefore, ".Local government increases the taxes that are levied on firms" is likely to shift the supply curve towards left OPTION B is correct.
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