a monopolist produces a good with a constant marginal cost of c=10 and fixed cost F=1000 Demand for the product is given by D(p)=90-p

The firm could bu subjected to price regulation the enforces marginal cost prices and subsidises any losses of the company.Suppose the regulators objective is to maximise the difference between total welfare and the cost of subsidies allocated to the company .Assume the social cost of subsidies S are BS where B>=0

Which is correct?

The unregulated monopoly price is 40 and price regulation is optimal for any B<=4/5

The unregulated monopoly price is 50 and price regulation is optimal for any B<=2/5

The unregulated monopoly price is 40 and price regulation is optimal for any B<=2/5

The unregulated monopoly price is 500 and price regulation is optimal for any B<=4/5

None