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 = 10 !P. The total cost of production of an individual profit-maximizing firm in this industry is TC₁= 2Q₁. The reaction function of the remaining T !1 firms is:

A) Q_{T !1} = 4 !5Q₁.
B) Q_{T !1} = 5 !0.25Q₁
C) Q_{T !1} = 4 !0.5Q₁
D) Q_{T !1} = 5 !2Q₁
E) None of the above.