A profit-maximizing monopoly faces an inverse demand function described by the equation p(y) = 90 - y and its total costs are c(y) = 8y, where prices and costs are measured in dollars. In the past it was not taxed, but now it must pay a tax of 8 dollars per unit of output. After the tax, the monopoly will
A) increase its price by 4 dollars.
B) leave its price constant.
C) increase its price by 8 dollars.
D) increase its price by 12 dollars.
E) None of the above.

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The Answer of A profit-maximizing monopoly faces an inverse demand function described by the equation p(y) = 90 - y and its total costs are c(y) = 8y, where prices and costs are measured in dollars. In the past it was not taxed, but now it must pay a tax of 8 dollars per unit of output. After the tax, the monopoly will
A) increase its price by 4 dollars.
B) leave its price constant.
C) increase its price by 8 dollars.
D) increase its price by 12 dollars.
E) None of the above.

A Profit-Maximizing Monopoly Faces an Inverse Demand Function Described by the Equation