What is the likely effect of a subsidy on the market equilibrium price and quantity of a good?

A subsidy is a financial support given by the government to help lower the cost of producing a good. When a subsidy is provided, producers can make the good at a lower cost, which encourages them to produce more of it. As a result, the supply of the good increases, shifting the supply curve to the right. This increase in supply usually leads to a lower market equilibrium price, making the good cheaper for consumers, while also increasing the quantity available in the market. For example, if the government gives farmers a subsidy for growing wheat, more wheat will be produced, prices will drop, and consumers will find it easier to buy more wheat.