Please slove the attached qustion Suppose that a honey farm is located next to an apple orchard and each acts as a competitive firm.Let the amount of apples produced be measured by A and the amount of honey produced bemeasured by H. The cost functions of the two firms are CH(H)=H²/100 and CA(A)= A²/100-H. The priceof honey is $2 and the price of apples is $3.(a) If the firms each operate independently, what will the equilibrium amounts of honey andapples produced be?(b) Suppose that the honey and apple firms merged. What would be the profit-maximizingoutput of honey for the combined firm? What would be the profit-maximizing amount ofapples?

In economic matters, an externality is a cost or advantage to a uninvolved outsider that emerges as…

(a) If the firms each operate independently, what will the equilibrium amounts of honey and apples produced be? (b) Suppose that the honey and apple firms merged. What would be the profit-maximizing output of honey for the combined firm? What would be the profit-maximizing amount of apples?

(a) If the firms each operate independently, what will the equilibrium amounts of honey and apples produced be? (b) Suppose that the honey and apple firms merged. What would be the profit-maximizing output of honey for the combined firm? What would be the profit-maximizing amount of apples?

Economics (MindTap Course List)

13th Edition

ISBN:9781337617383

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter22: Perfect Competition

Section: Chapter Questions

Problem 4QP

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Question

Please slove the attached qustion

Suppose that a honey farm is located next to an apple orchard and each acts as a competitive firm.
Let the amount of apples produced be measured by A and the amount of honey produced be
measured by H. The cost functions of the two firms are CH(H)=H²/100 and CA(A)= A²/100-H. The price
of honey is $2 and the price of apples is $3.
(a) If the firms each operate independently, what will the equilibrium amounts of honey and
apples produced be?
(b) Suppose that the honey and apple firms merged. What would be the profit-maximizing
output of honey for the combined firm? What would be the profit-maximizing amount of
apples?

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