(25 points)Suppose that Intel has a monopoly in the market for computer chips.

 (25 points)Suppose that Intel has a monopoly in the market for computer chips. In

Order to produce X computer chips, it costs Intel C(X)= 2X2

(2 points) Find the marginal cost of producing a computer chip for Intel. (6points)The demand for computer chips is XD = 12 − 0.25 P. Find the level of output that maximizes Intel’s profits .What price is Intel charging?  (4 points) What level of output would maximize total surplus in the computer chip market?  (4points) suppose the government knew the demand and production functions. Find a price regulation the government could impose that would induce Intel to maximize total surplus, i.e., produce the efficient quantity from part (c).(6points) If the government subsidized Intel s for every unit of computer chips produced, what quantity would Intel choose as a function of s? Find the choice of subsidy that maximizes total surplus, i.e., induces Intel to produce the efficient quantity from part(c). (3 points) Both the price regulation policy from part (d)and the subsidy policy from part (e) maximize total surplus. Is there any reason someone might prefer one policy over the other?