How does Government subsidiaries change the market for products and services?

Answer 1

I'm assuming that you mean "subsidies", not "subsidiaries".

Government subsidies create distortion in the economy. Generally, prices are set by supply and demand. If the cost to produce an item is high, then the quantity sold will only be high if the demand for the product is also high.

Government subsidies artificially lower the cost of production. This means that more will be sold at a lower price than the general forces of the market dictate.

Because natural supply and demand generally forces resources to their most efficient use, and government subsidies affect the natural balance of supply and demand, the economy becomes less efficient. That is, people will put their own resources into industries that receive government subsidies because the return will be higher (i.e. the government is sharing the cost of production) than for other sectors of the economy. This takes private resources out of more efficient uses in the economy.

Answer 2

There are numerous ways that governments and their subsidiary organizations may do this. They can enter a market that had previously been supplied by the private sector. An example of this might be the development of public school or hospital systems. They can also exit a market they had previously supplied, for example by privatization, or by outsourcing one or more functions of the organization.

Answer 3

I though that subsidizing was a result from the Great Depression and since the government has helped farmers that many big corporations are now ripping us off by unethically using these subsidaries.

Go small farm owners. Kick butt.