The Bonus of a Plant Manager in a Vertically Integrated

Multiple Choice

The bonus of a plant manager in a vertically integrated firm is based on the following formula: Bonus = 10,000 - 0.5(Q_f - Q)
Where Q_f is feasible production and Q is actual production. The value for Q_f is provided by the plant manager at the beginning of the year. With this scheme, the plant manager has an incentive:

A) to underestimate Q_f.
B) to overestimate Q_f.
C) to reveal the true Q_f and make Q as small as possible.
D) to reveal the true Q_f and make Q as large as possible.