1. A monopolist's cost curve is given by def) = 25 + 4q and she faces the demand curve q = 20 p. a. What output will the monopolist sell, and at what price? b. What output level, if produced, would maximize social surplus in this situation? Remember to account for the fixed cost of production while calculating the social cost of production. c. Suppose the government was to give this monopolist a subsidy of $5 per unit produced. At what level should the government set s such that monopolist ends up producing the output level in (b)? Show your work. 2. Consider the First and Second degree price discrimination model discussed in class. a. In the case of the Second Degree Price Discrimination example, if the number of units in Option H is fixed at 12, what is the prot-maximizing number of discrete units in the Option L package? Explain. Suppose now that the monopolist has a constant marginal cost of $1. i. If First Degree price discrimination isfeasible, what Take-lt-Or-Leave-lt offers should the monopolist make to each consumer in order to maximize her profits? ii. If the monopolist can't tell the two customers apart, and engages in Second Degree price discrimination, what two options (what quantity and payment for each) should she put on the menu? Assume that for Option H, the monopolist chooses the same number of units as your answer in part (i)