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A Profit-Maximizing Monopolist Has the Cost Schedule C(y)= 40y

Question 17

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A profit-maximizing monopolist has the cost schedule c(y) = 40y.The demand for her product is given by y = 600/p4, where p is her price.Suppose that the government tries to get her to increase her output by giving her a subsidy of $21 for every unit that she sells.Giving her the subsidy would make her


A) decrease her price by $49.
B) decrease her price by $28.
C) decrease her price by $10.50.
D) decrease her price by $21.
E) leave her price unchanged.

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