Charlie's Cherries grows and sells cherries on a small farm. Next door, Frank's Fish Farm grows rainbow trout in small, manmade ponds. Occasionally, the ponds must be drained and refilled. The wastewater from the ponds is perfect for watering Charlie's cherry trees.

The cost of producing a pound of fish is given byc

F

(F)=F^2/0.04 so the marginal cost isMC(F)=0.08F

The cost of producing a pound of cherries is given byc

(C)=C^2/0.04 so the marginal cost is MC(C)=0.08C.

If the two goods were produced by a single firm the cost would bec(C,F)=F^2/0.04 +C^2/0.04

MC(C)=0.08C

MCC(C)=0.08C. The marginal cost of producing a pound of fish, on the other hand, has an extra term included now and is given by

MCF(F)=0.08F1.

Both firms sell their products in a competitive market where the price of cherries is $4 per pound and rainbow trout are $12 per pound.

2nd attempt

Part 1(2points)

See Hint

If Charlie and Frank both operate independently, Charlie will produce(number)pounds of cherries and Frank will produce(number)pounds of rainbow trout in equilibrium. Give your answers to two decimal places.

Part 2(2points)

See Hint

Suppose Charlie and Frank decide to merge their operations. They form a new company called Chank's Cherries and Rainbows. If Chank's is profit maximizing, it will produce(number)pounds of cherries and(number)pounds of rainbow trout. Give your answers to two decimal places.