Consider the Monopolistic banking model of Freixas and Rochet Section 3.2., where there is a separable cost function so that the loan decision can be considered separately from the deposit decision. Consider a linear model for the demand for loans where ry, = 10-2L and a cost function of the form C(L) = 212 . A Monopolist bank maximizes (D) = (rL(L) - r)L - C(L). Suppose that r = 2 5. What is the Monopolist's profit maximizing level of Loans? A. } B. 1 C. 2 D. 4 E. None of A-D