Question 2 The demand function of a monopoly is given as p = 280 -2Q and its marginal cost of production is constant at $100. To minimize deadweight loss (DWL), the government plans to implement one of two types of policy: subsidy or price ceiling. If the government provides a subsidy (a negative tax) of $20 per unit of output to the monopoly, what is the size of DWL from the subsidized monopoly? If, instead, the government imposes a price ceiling at $130, what is the size of DWL from the price ceiling? Which policy is better from the social welfare perspective?