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A subsidy is money given by the state to individuals in an industry to lower prices. For example, if Bill's hat costs $10 to make, but China can do it for $5, a $6 per hat subsidy can help Bill compete. Subsidies can benefit society by encouraging new technology or exploration, but can also harm by supporting unprofitable industries over others. The US heavily subsidizes some industries at the expense of those in poorer countries, like Brazil.
