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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Definitions:

Substitute Physician

A medical doctor who temporarily fills in for another physician, often referred to as a locum tenens.

Locum Tenens

A person who temporarily fulfills the duties of another; specifically, a physician or clergyman acting temporarily for another.

Res Ipsa Loquitur

Latin, meaning “the thing speaks for itself,” which is also known as the doctrine of common knowledge.

Respondeat Superior

Latin, meaning “let the master answer,” a doctrine under which an employer is legally liable for the acts of his or her employees, if such acts were performed within the scope of the employee’s duties.