A monopolist has access to an industry with market demand P = 9-y, whereyis the firm's quantity. Its cost function is C(y) = 5y.

A. Determine the firm's profit maximizing quantity. Show your outcome on a graph. What is the firm's profit?

B. Compute the point-elasticity of demand at the profit-maximizing output. Would the firm ever operate at a point elasticity less than 1? Explain.

C. The government can use a subsidy to influence the monopolist to produce the efficient quantity in this market. Solve for the efficient outcome, and determine the per-unit subsidy that must be used.

D. Determine the cost to the government of this subsidy. Should the government engage in this subsidy policy? Explain.