In Problem 2, Suppose That the Cost Function of the Honey

question 22

Multiple Choice

In Problem 2, suppose that the cost function of the honey farm is C_H(H, A) = - 1A and the cost function of the apple orchard is C_A(H, A) = , 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.

---

Definitions:

Presumed Damages

Damages assumed by law to have occurred from a wrongful act, without the need for proof of loss or injury.

Actual Injury

A tangible harm or damage that an individual suffers, which can be physical or financial in nature.

Absolute Privilege

A complete defense in defamation cases, where certain acts cannot be sued for defamation irrespective of the intent or truthfulness, typically seen in parliamentary and judicial proceedings.

Defamatory Statement

A false communication that injures a person's reputation, exposing them to public contempt, ridicule, aversion, or disgrace.