An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard produces apples. The cost function of the apiary is СH (H,A) = H² - 2A. 100 The cost function of the apple orchard is CA (H,A) of honey and apples produced respectively. A² 100' = where H and A are the number of units The price of honey is $1 and the price of apples is $3 per unit. (i) If the firms operate independently, how many apples would be produced? (ii) If the firms merged and were operated by a single owner so as to maximize total profit, how many apples would be produced?

Microeconomic Theory
12th Edition
ISBN:9781337517942
Author:NICHOLSON
Publisher:NICHOLSON
Chapter11: Profit Maximization
Section: Chapter Questions
Problem 11.4P
Question

the answers are A=150 for question 1 and A=250 for question 2. please show the steps thank you :)

 

An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard
produces apples.
The cost function of the apiary is СH (H,A) =
H²
-
2A.
100
The cost function of the apple orchard is CA (H,A)
of honey and apples produced respectively.
A²
100'
= where H and A are the number of units
The price of honey is $1 and the price of apples is $3 per unit.
(i)
If the firms operate independently, how many apples would be produced?
(ii)
If the firms merged and were operated by a single owner so as to maximize total
profit, how many apples would be produced?
Transcribed Image Text:An apiary is located next to an apple orchard. The apiary produces honey and the apple orchard produces apples. The cost function of the apiary is СH (H,A) = H² - 2A. 100 The cost function of the apple orchard is CA (H,A) of honey and apples produced respectively. A² 100' = where H and A are the number of units The price of honey is $1 and the price of apples is $3 per unit. (i) If the firms operate independently, how many apples would be produced? (ii) If the firms merged and were operated by a single owner so as to maximize total profit, how many apples would be produced?
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