Correct Answer - Option 2 : 16 kbits
The total capacity is given a 32 kB. This can be written as:
32k × 8 bits = 256k bits
Since 16 IC's are used, each IC will provide:
∴ 14-bit address will give 16k memory locations, i.e. each chip can address 16k memory locations.
So, the capacity of each IC = 16k bits.