The bonus of a plant manager in a vertically integrated firm is based

The bonus of a plant manager in a vertically integrated firm is based on the following formula:

Bonus = 10,000 – 0.5(Qf – Q)

where Qf is feasible production and Q is actual production. The value for Qf is provided by the plant manager at the beginning of the year. With this scheme, the plant manager has an incentive:
A) to underestimate Qf.
B) to overestimate Qf.
C) to reveal the true Qf and make Q as small as possible.
D) to reveal the true Qf and make Q as large as possible.

ANSWER

A