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An Apiary Is Located Next to an Apple Orchard

Question 14

Multiple Choice

An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard produces apples. The cost function of the apiary is CH(H, A) = An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard produces apples. The cost function of the apiary is C<sub>H</sub>(H, A) = - 3A and the cost function of the apple orchard is C<sub>A</sub>(H, A) = , where H and A are the number of units of honey and apples produced respectively. The price of honey is $2 and the price of apples is $7 per unit. Let A<sub>1</sub> be the output of apples if the firms operate independently, and let A<sub>2</sub> be the output of apples if the firms are operated by a single owner so as to maximize total profit. A) A<sub>1</sub> = A<sub>2</sub> = 350. B) A<sub>1</sub> = 250 and A<sub>2</sub> = 350. C) A<sub>1</sub> = 175 and A<sub>2</sub> = 350. D) A<sub>1</sub> = 350 and A<sub>2</sub> = 500. E) A<sub>1</sub> = 100 and A<sub>2</sub> = 350. - 3A and the cost function of the apple orchard is CA(H, A) = An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard produces apples. The cost function of the apiary is C<sub>H</sub>(H, A) = - 3A and the cost function of the apple orchard is C<sub>A</sub>(H, A) = , where H and A are the number of units of honey and apples produced respectively. The price of honey is $2 and the price of apples is $7 per unit. Let A<sub>1</sub> be the output of apples if the firms operate independently, and let A<sub>2</sub> be the output of apples if the firms are operated by a single owner so as to maximize total profit. A) A<sub>1</sub> = A<sub>2</sub> = 350. B) A<sub>1</sub> = 250 and A<sub>2</sub> = 350. C) A<sub>1</sub> = 175 and A<sub>2</sub> = 350. D) A<sub>1</sub> = 350 and A<sub>2</sub> = 500. E) A<sub>1</sub> = 100 and A<sub>2</sub> = 350. , where H and A are the number of units of honey and apples produced respectively. The price of honey is $2 and the price of apples is $7 per unit. Let A1 be the output of apples if the firms operate independently, and let A2 be the output of apples if the firms are operated by a single owner so as to maximize total profit.


A) A1 = A2 = 350.
B) A1 = 250 and A2 = 350.
C) A1 = 175 and A2 = 350.
D) A1 = 350 and A2 = 500.
E) A1 = 100 and A2 = 350.

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