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A subsidy is the opposite of a tax where the government gives money for making an item. A $4 subsidy in a market lowers the cost of production, moving the supply curve down by the amount of the subsidy. This effectively increases supply, moving the curve to the right, but accurately shifting it downward. Each point on the curve is adjusted by the subsidy amount, such as a point from 100, 10 becoming 100, 6.