Suppose That the Cost Function of the Honey Farm Is

suppose that the cost function of the honey farm is C_H(H, A) = H ²/100 - 1A and the cost function of the apple orchard is C_A(H, A) = A²/100, where H and A are the number of units of honey and apples produced respectively.The price of honey is $8 and the price of apples is $6 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 profit-maximizing single owner.

A) A₁ = 175 and A₂ = 300.
B) A₁ = 150 and A₂ = 300.
C) A₁ = 300 and A₂ = 350.
D) A₁ = A₂ = 300.
E) A₁ = 400 and A₂ = 300.

Correct Answer:

Verified

Unlock this answer now
Get Access to more Verified Answers free of charge

Access For Free