A monopolist with constant marginal costs faces a demand curve with a constant elasticity of demand and does not practice price discrimination.If the government imposes a tax of $1 per unit of goods sold by the monopolist, the monopolist will increase his price by more than $1 per unit.

When a tax is imposed on a monopolist, its marginal cost of production does not change, but the price increases by the amount of the tax plus an additional amount necessary to maintain the same level of profit. Since the demand curve faced by the monopolist has a constant elasticity of demand, the price increase will be greater than the amount of the tax, in order to compensate for the reduction in quantity demanded due to the higher price. Therefore, the monopolist will increase the price by more than $1 per unit.