A Profit-Maximizing Monopolist Faces the Demand Curve Q = 100

question 17

Multiple Choice

A profit-maximizing monopolist faces the demand curve q = 100 - 3p. It produces at a constant marginal cost of $20 per unit. A quantity tax of $10 per unit is imposed on the monopolist's product. The price of the monopolist's product

• A) rises by $5.
• B) rises by $10.
• C) rises by $20.
• D) rises by $12.
• E) stays constant.

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