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a subsidy is basically a sum of money that the state gives to people from a certain industry to keep the price of the product or service theyre selling lower than it would have normally been lets assume that cause billed $10 to produce a hat whereas someone from China can do it for just $5 in this case a $6 per hat subsidy from Uncle Sam can help Bill all of a sudden produce hats cheaper than the Chinese in some cases subsidies benefit society as a whole for example by encouraging people to develop new technologies such as solar or wind energy or by encouraging NASA to explore the universe in a lot of other cases however they do more harm than good for example producing con would normally not be all that profitable in the United States because the costs are higher than in less developed countries the u.s. therefore heavily subsidizes this industry at the expense of people from some of the poorest parts of the world in some cases who are not able to compete Brazil for example got ups
