Business, 16.06.2020 18:57 Ashleyrango5371

Suppose an apple orchard is located next to a honey farm and each is separately owned and both operate in perfectly competitive industries. The cost functions of the two farms are as follows (the presence of honey bees makes it cheaper for the apple farmer to grow apples) where C is cost and Q is quantity in apples and honey: Ch= Qh^2/100
Ca= Qa^2/100)-Qn

Required:
a. If the price of apples is $3/ea and the price of honey is $2/unit, how many of each will each farmer produce?
b. What is the socially optimal output of honey and apples?
c. What suggestion would you make to ensure that the farmers behave in a socially optimal way?

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Suppose an apple orchard is located next to a honey farm and each is separately owned and both opera...