The 2nd option is the correct answer.
That is, "Representaion in the House of Representatives would be
based on each state's population and every state would have two
senators" is the correct choice.
The reason behind great compromise was to satisfy both the big
and small states in the US. Big states wanted representation
according to population. Small states wanted equal represntation
irrespective of size. So a middle ground was found as a combination
of both the measures. So, second option is correct.