Case: A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means: o At a cost of $10 per acre of trees o Beekeeping has a marginal cost MC = 10 +5Q, ▪ where is the number of beehives. o Each hive yields $40 worth of honey. Questions: (d) Is a Beekeeper a Price-Taker or a Price-Maker? (e) Why?
Case: A beekeeper lives adjacent to an apple orchard. • The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means: o At a cost of $10 per acre of trees o Beekeeping has a marginal cost MC = 10 +5Q, ▪ where is the number of beehives. o Each hive yields $40 worth of honey. Questions: (d) Is a Beekeeper a Price-Taker or a Price-Maker? (e) Why?
Principles of Economics 2e
2nd Edition
ISBN:9781947172364
Author:Steven A. Greenlaw; David Shapiro
Publisher:Steven A. Greenlaw; David Shapiro
Chapter12: Environmental Protection And Negative Externalities
Section: Chapter Questions
Problem 43P: A city currently emits 15 million gallons (MG) of raw sewage into a lake that is beside the city....
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