Amonopolist rm faces a demand with constant elasticity of 1.2. It has a constant marginal cost of $25 per unit and sets a price to maXimize prot. If marginal cost should increase by 25 percent, would the price charged also rise by 25 percent? 0 A. Yes. Since the price elasticity of demand is constant, P: BMC. Thus, if MC increases by 25 percent, price also increases by 25 percent. 0 B. No. Since the demand curve is downward sloping, a 25 percent increase in MC will cause the price to increase by less than 25 percent. O C. No. Since the demand curve Is downward sloping, a 25 percent increase in MC WIII cause the price to Increase by more than 25 percent. 0 D. Yes. Since the price elasticity of demand is constant. P: 1.2MC. Thus. if MC increases by 25 percent. price also increases by 25 percent