If a specific subsidy (negative tax) of s is given to only one competitive firm, how should that firm change its output level to maximize its profit, and how does its maximum profit change? Let the market price be p, the marginal cost of production (prior to the subsidy) for the firm be MC, and the subsidy bes To maximize profit with the subsidy, the firm should
A, increase its production until p=s.
B. not change its level of production. S.
C. increase its production until p-MC + s
D. increase its production until p MC. 0 E. increase its production until p= MC-s S. The firm's profit with the subsidy will
