Suppose That the Cost Function of the Honey Farm Is

question 13

Multiple Choice

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.

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Definitions:

Economic Factors

Variables or conditions in the economic environment that affect the performance of investments, markets, or economies, such as inflation, interest rates, and GDP growth.

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Investment portfolios constructed to spread out risk by including a variety of asset classes and securities.

Mispriced Securities

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