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

The cook corporation has two divisions--east and west. the divisions have the following revenues and expenses: east west sales $ 603,000 $ 506,000 variable costs 231,000 300,000 traceable fixed costs 151,500 192,000 allocated common corporate costs 128,600 156,000 net operating income (loss) $ 91,900 $ (142,000 ) the management of cook is considering the elimination of the west division. if the west division were eliminated, its traceable fixed costs could be avoided. total common corporate costs would be unaffected by this decision. given these data, the elimination of the west division would result in an overall company net operating income (loss)