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Suppose That the Cost Function of the Honey Farm Is

Question 3

Multiple Choice

suppose that the cost function of the honey farm is CH(H, A) = H 2/100 - 2A and the cost function of the apple orchard is CA(H, A) = A2/100, where H and A are the number of units of honey and apples produced respectively.The price of honey is $5 and the price of apples is $4 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 = 200 and A2 = 300.
B) A1 = A2 = 200.
C) A1 = 100 and A2 = 200.
D) A1 = 150 and A2 = 200.
E) A1 = 250 and A2 = 200.

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