Suppose That the Cost Function of the Honey Farm Is

question 21

Multiple Choice

suppose that the cost function of the honey farm is C_H(H, A) = H ²/100 - 3A 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 $7 and the price of apples is $5 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 = 125 and A₂ = 250.
• B)A₁ = A₂ = 250.
• C)A₁ = 200 and A₂ = 250.
• D)A₁ = 250 and A₂ = 400.
• E)A₁ = 350 and A₂ = 250.

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