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A subsidy by government offered to businesses enables them to keep prices of certain products lenient so that people can afford them. For instance, if a domestic company sells a product for $10 while its international competitor sells the same for $6, consumers will buy items from the latter.

A. : to purchase the assistance of by payment of a subsidy. b. : to aid or promote (someone or something, such as a private enterprise) with public money. subsidize soybean farmers.

Article 14 of the SCM Agreement, entitled 'Calculation of the Amount of a Subsidy in Terms of the Benefit to the Recipient', provides guidance as to how the relevant market shall be identified.

Subsidies come in various forms including: direct (cash grants, interest-free loans) and indirect (tax breaks, insurance, low-interest loans, accelerated depreciation, rent rebates).

The WTO Agreement on Subsidies and Countervailing Measures (also known as the Subsidies Agreement or the SCM Agreement) establishes multilateral disciplines on the use of subsidies and provides mechanisms for challenging government measures that contravene these rules.

The most common type of subsidy is a production subsidy, which reduces the costs of producing a good or service. This can be done by providing tax breaks or direct payments to businesses. Another common type of subsidy is a consumption subsidy, which reduces the cost of consuming a good or service.

Examples of government subsidies for consumers Subsidies for people buying electric vehicles. Feed-in tariffs for renewable energy fed back into the grid by households. Food and energy subsidies ? often used in emerging / developing countries.