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The text explains the concept of subsidies in economics, which is the opposite of a tax. A subsidy is when the government gives money to producers for making an item, thus reducing their costs. By providing a $4 subsidy in a market, the supply curve shifts down by the amount of the subsidy, making it cheaper to produce the item. This results in an increase in supply as producers can now produce more at a lower cost. Each point on the supply curve shifts downward by the amount of the subsidy, affecting the quantity supplied at different price points.
