There Are Two Firms in the Blastopheme Industry

There are two firms in the blastopheme industry.The demand curve for blastophemes is given by p = 4,500 - 4q.Each firm has one manufacturing plant and each firm i has a cost function C(q_i) = q²i, where q_i is the output of firm i.The two firms form a cartel and arrange to split total industry profits equally.Under this cartel arrangement, they will maximize joint profits if

A) they produce a total of 375 units, no matter which firm produces them.
B) and only if each firm produces 250 units in its plant.
C) and only if they each produce a total of 562.50 units.
D) they produce a total of 500 units, no matter which firm produces them.
E) they shut down one of the two plants, having the other operate as a monopoly and splitting the profits.

Correct Answer:

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