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A subsidy is money given by the state to individuals in a specific industry to keep prices lower. For example, if it costs $10 to produce a hat in the US and $5 in China, a $6 per hat subsidy can help US producers like Bill compete. Subsidies can benefit society by encouraging new technologies, but in some cases, they harm industries in less developed countries. Brazil, for instance, struggles to compete with heavily subsidized industries in the US.