If a Regulatory Agency Imposes a Lump- Sum Tax on a Monopolist

If a regulatory agency imposes a lump- sum tax on a monopolist (i.e., a tax that is independent of the level of output) it will reduce the firm's profits because the tax increases

A) all costs as it shifts the demand curve to the left.
B) the ATC but not the MC, leaving price and output unchanged.
C) both the ATC and the MC, leaving price and output unchanged.
D) all costs as it shifts the demand curve to the right.
E) price whereas quantity demanded falls.