Question 4 Read the Bloomberg article "AT&T, Comcast Gain From Subsidy Paid for by Cus- tomers" by Todd Shields which is posted on the website. 1. From our class discussions, we know that one way to regulate a monopoly is to set a price ceiling, so that more output is produced at a lower equilibrium price, helping to eliminate some of the welfare loss due to the lack of competition. This article suggests that a monopoly can be "regulated" in a different way, so as to achieve the same outcome. Outline the major points of the article, making sure to include the regulation strategy under consideration. 2. One way to model a subsidy into the monopolist's decision is to assume that they have a decrease in per-unit costs. That is, instead of having a marginal cost curve that looks like MC = 2Q as in Problem 2, we can write MC = 2Q - s, where s is the amount that the firm is subsidize per-unit of output. Suppose that demand and marginal revenue are given by the same equations as in Problem 2, but that MC = 2Q - 100, were s = 3 100 is the per-unit subsidy given to the monopoly. Under this scenario, solve for equilibrium price and quantity. 3. Compare your answer from 2 above to your answer in part 4 of Question 2. Is the subsidy able to obtain the efficient level of output and price? What would be some potential economic as well as political difficulties with implementing such a strategy