Suppose there are ten identical manufacturing firms that produce computer chips with machinery (capital, K) and labor (L) , and each firm has a production function of the form q = 10KL^0.5. What is the industry-level production function?

A) Q = 10K¹⁰L⁵
B) Q = 100KL^0.5
C) Q = 100L^0.5
D) none of the above

To derive the industry-level production function, we simply add up the production functions of all ten firms. Because the firms are identical and thus have the same production function, we can also rewrite this as multiplying the production function by the number of firms, which is 10. Thus, the industry-level production function is:

Q = 10(q) = 10(10KL^0.5) = 100KL^0.5

Therefore, the best choice is B.