Our orders are delivered strictly on time without delay 
- Suppose that a honey farm is located next to an apple orchard and each acts as a compet-itive firm. Let the amount of apples produced be measured byAand the amount of honeyproduced be measured byH. The cost functions of the two firms arecH(H) =H2/100andcA(A) =A2/100−H. The price of honey is $2 and the price of apples is $3.
(a) If the firms eachoperate independently, in the equilibrium, what will be the amountof honey produced and what will be the amount of apples produced? (Hint: Set upand solve firm’s maximization problem, respectively.)
(b) Suppose that the honey and apple firmsmerged. What would be the profit-maximizingoutput of honey for the merged firm? What would be the profit-maximizing amountof apples? (Hint: Merge the firms’ profits and costs.)
