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A subsidy is the opposite of a tax. It is money given by the government to manufacturers for making a product. In a market with a $4 subsidy, the supply curve shifts downwards because production costs decrease. This results in an increase in supply, with each point on the curve moving down by $4. For example, a point at 100, 10 becomes 100, 6. This shift represents the impact of subsidies on supply in the market.