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danny2012 danny2012
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A year ago

The diagram below shows the supply and demand diagrams for the competitive market for honey in one region. MC0 represents private marginal cost and MB0 represents private marginal benefit.

Short description: A graph plots quantity in kilograms of honey per month against price in dollars per kilogram. Long description: The horizontal axis representing the quantity of kilograms of honey per month ranges from 10 to 140, in increments of 10. The vertical axis representing price in dollars per kilogram ranges from 0 to 12, in increments of 1. The graph plots six lines. Three decreasing lines represent MB subscript 1, D equals MB subscript 0, and MB subscript 2. Three increasing lines represent MC subscript 2, S equals MC subscript 0, MC subscript 1. MC subscript 2 intersect MB subscript 1, D equals MB subscript 0, and MB subscript 2 at (40, 7), (60, 9), and (80, 11). S equals MC subscript 0 intersect MB subscript 1, D equals MB subscript 0, and MB subscript 2 at (60, 5), (80, 7), and (100, 9). MC subscript 1 intersect MB subscript 1, D equals MB subscript 0, and MB subscript 2 at (80, 3), (100, 5), and (120, 7).

FIGURE 16-3

Refer to Figure 16-3. Assume there are two types of firms in this region-beekeepers that produce honey and orchard keepers that produce peaches. The bees provide a benefit to the orchard keepers by pollinating their peach trees. If MB2 represents the social marginal benefit of honey, the external benefit associated with producing one unit of honey is



▸ $1.

▸ $2.

▸ $3.

▸ $4.

▸ $5.
Textbook 
Microeconomics

Microeconomics


Edition: 17th
Author:
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CrazyW27CrazyW27
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