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.