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Suppose that in the market of bananas, quantity demanded is represented by Qd = 100 −...

Suppose that in the market of bananas, quantity demanded is represented by Qd = 100 − 2p, and quantity supplied is represented by Qs = 2p + 4. If the government provides a subsidy of $2 per banana, which if the following is correct?

(a) Bananas price fall by $1 and 2 more bananas will be sold

(b) Bananas price will fall by $1, and 2 fewer bananas will be sold

(c) Bananas price will rise by $18 and 2 more banana will be sold

(d) The change in price will depend on whether the subsidy is given to the producer or the consumer

(e) None of the above

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