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D. She did not divide both sides by -1.
The correct steps to solve the equation 12 - p = 16 would be to subtract 12 from both sides to isolate p on one side. Willow mistakenly added 12 to both sides instead. The correct steps would be:
12 - p = 16
-p = 16 - 12
-p = 4
p = -4
So Willow's error was in adding 12 instead of subtracting it.