The Demand for the Output of a Multi-Firm Industry Is

Multiple Choice

The demand for the output of a multi-firm industry is Q_T = 50 !2.5P. The total cost of production of an individual profit-maximizing firm in this industry is TC₁= 4Q₁. The reaction function of firm 1 is:

A) Q₁ = 50 !2.5Q_{T !1}.
B) Q₁ = 50 !0.5Q_{T !1}
C) Q₁ = 16 !0.4Q_{T !1}
D) Q₁ = 20 !0.5Q_{T !1}
E) None of the above.