Agriculture is the backbone of the national economy and farmers play a pivotal role to strengthen the economy of the country. Wheat, rice, sugar cane and cotton are important crops of Pakistan. Urea, diammonium phosphate (DAP) are the basic elements in production of crops. Currently, Government of Pakistan has approved the subsidy on urea and DAP fertilizers. The prices of fertilizers before and after the subsidy have been given below.
Fertilizer Weight Price before subsidy Price after subsidy
Urea 50 kg Rs.1790 Rs.1400
DAP 50 kg Rs.2856 Rs.2558
It is expected that this policy of subsidy will create many opportunities not only for farmers but also for suppliers.
After reading the above facts and figure, logically explain that how this subsidy will affect the price of major crops and their supply?