The demand for the output of a multi-firm industry is QT = 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 !2.5QT !1.
B) Q1 = 50 !0.5QT !1
C) Q1 = 16 !0.4QT !1
D) Q1 = 20 !0.5QT !1
E) None of the above.
Correct Answer:
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