# Homework_1_Answer_Key - Econ 342 Homework#1 McLeod Due in...

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1. (35 points) Suppose honey is produced in a beehive using bees and sugar. Each honey producer uses one beehive which she rents for \$10 per month. Producing q gallons of honey requires spending 3q dollars per month on bees, and q 2 dollars per month on sugar. a) (3 points) What is the total cost of producing honey for an individual honey producer? TC = 10 + 3q + q 2 b) (3 points) What is the average cost of producing honey per month for an individual producer? ATC = (10 + 3q + q 2 )/q c) (8 points) In general, if the total cost of producing honey is a + bq + cq 2 , then the marginal cost of producing honey is b + 2cq. Assuming each honey producer operates as a price-taker, what is the supply curve for an individual producer? MC = 3 +2q.
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## This note was uploaded on 01/27/2010 for the course ECON 342 taught by Professor Mcleod during the Spring '09 term at Penn State.

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Homework_1_Answer_Key - Econ 342 Homework#1 McLeod Due in...

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