A profit-maximizing monopoly faces an inverse demand functio

A profit-maximizing monopoly faces an inverse demand function described by the equation p(y) = 50 -… Show more A profit-maximizing monopoly faces an inverse demand function described by the equation p(y) = 50 – y and its total costs are c(y) = 10y, where prices and costs are measured in dollars. In the past it was not taxed, but now it must pay a tax of 2 dollars per unit of output. After the tax, the monopoly will…a) leave its price constant. b) increase its price by 2 dollars. c) increase its price by 3 dollars. d) increase its price by 1 dollar. e) none of the above. • Show less

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