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When there is a subsidy introduced in the market, the supply curve shifts downward by the amount of the subsidy, making it cheaper for producers to make the item. This results in an increase in supply as the government provides money to help make the item. The subsidy decreases the cost of production, leading to a shift in the supply curve to the right, but it is accurately measured by shifting it downward by the amount of the subsidy. This adjustment affects every point on the curve by reducing the cost of production.
