Consider a monopoly facing the following demand curve Qd = 120 -2P. The monopoly cost function is CT = Q2.

a) Determine the amount traded in this economy. Find the profits of the monopoly.

b) Find the price and the quantity traded in the social optimum of this economy.

c) Calculate the welfare loss due to the monopoly effect.

d) The government wants to subsidize the monopoly so that it produces in the social optimum. Determine the optimal subsidy.