The Value of a Price-Distorting Subsidy for a Three-Bedroom Apartment

The value of a price-distorting subsidy for a three-bedroom apartment is $100 per month. This means that the person choosing to live in an apartment of that size would have to pay an extra $100 per month at the market rent. Then it follows that:

A) that person would be worse off if she received a cash subsidy of $100 per month.
B) that person would be better off if she received a cash subsidy of $100 per month.
C) that person would be just as well off if she received a cash subsidy of less than $100 per month.
D) both b and c