When a company or industry is subsidized because it is not profitable,a secondary effect of the subsidies will likely be that

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Subsidizing unprofitable companies or industries allows them to continue operating without necessarily improving their efficiency or productivity. This means that resources, such as labor and capital, may remain in low productivity areas instead of being used in more productive projects. Therefore, the secondary effect of subsidies in this case is that unproductive resource use is prolonged or even perpetuated. A and C are incorrect because subsidizing unprofitable companies or industries does not necessarily promote economic efficiency or stabilize and make them profitable. D is incorrect because subsidies for unprofitable companies or industries may not necessarily direct resources towards highly productive projects.

When a Company or Industry Is Subsidized Because It Is