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

question 32

Multiple Choice

A profit-maximizing monopoly faces an inverse demand function described by the equation p(y) = 40 - y and its total costs are c(y) = 7y, where prices and costs are measured in dollars.In the past it was not taxed, but now it must pay a tax of 6 dollars per unit of output.After the tax, the monopoly will

• A)increase its price by 6 dollars.
• B)increase its price by 9 dollars.
• C)increase its price by 3 dollars.
• D)leave its price constant.
• E)None of the above.

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Definitions:

ATP Molecules

Adenosine triphosphate molecules, which serve as the primary energy carrier in cells, powering various cellular processes.

Kilocalories

A unit of energy measurement in food, commonly called calories, equal to 1,000 small calories, used to quantify the energy food provides to the body.

Energy Difference

The variation in energy levels between two states, important in physics to describe phenomena such as transitions between quantum states.

Phosphate Bond

A chemical bond between a phosphorus atom and another atom, crucial in the storage and release of energy in living organisms.