In general, a special money payment by a government to one or more firms in a favored industry, usually for the purpose of enabling them to sell one or more of their products at a price below their costs of production (or at least at a price below the free market price). Subsidies are typically advocated either to promote more widespread consumption of some good or service deemed to be especially essential or meritorious by the government ("merit goods"), to boost the levels of production of goods whose manufacture or consumption involves sizable "positive externalities" or partake of the nature of "public goods,", or sometimes simply to stave off bankruptcy and unemployment in a declining industry or segment of an industry whose owners and/or workers enjoy a lot of political influence.

[See also: externalities, public goods, merit goods]