What Would Happen in the Market for SUVs If the Government

Multiple Choice

What would happen in the market for SUVs if the government started to subsidize the production of SUVs that get very few miles per gallon and the price of gasoline went up?

A) The equilibrium price will go down and equilibrium quantity will go up.
B) The equilibrium price will go down and equilibrium quantity will be indeterminate.
C) The equilibrium price will be indeterminate and equilibrium quantity will go up.
D) The equilibrium price will go up and equilibrium quantity will be indeterminate.
E) The equilibrium price will be indeterminate and equilibrium quantity will go down.