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The diagram to the right shows the perfectly competitive market for honey. The demand curve shows the marginal benefit to society of consuming an extra unit of honey. The supply curve shows the marginal costs of producing an extra unit of honey. However, suppose that, as a by-product to producing honey, honeybees pollinate flowers, allowing more flowers to grow and bloom. Suppose that for each unit of honey produced, one unit of flowers is also created, providing an external benefit of $6. Use the line drawing tool to draw and label the social marginal cost curve. (Make sure that the curve's one end extends to the output level 18 and it crosses the demand curve.) Carefully follow the instructions above, and only draw the required objects. Price of Honey ($) 20.00- 18.00- 16.00- 14.00- 12.00- 10.00- 8.00- 6.00- 4.00- 2.00- 0.00+ 0 2 4 8 10 12 14 Quantity of Honey 6 S=MCp D=MB 16 18 20

The diagram to the right shows the perfectly competitive market for honey. The demand curve shows the marginal benefit to society of consuming an extra unit of honey. The supply curve shows the marginal costs of producing an extra unit of honey. However, suppose that, as a by-product to producing honey, honeybees pollinate flowers, allowing more flowers to grow and bloom. Suppose that for each unit of honey produced, one unit of flowers is also created, providing an external benefit of $6. Use the line drawing tool to draw and label the social marginal cost curve. (Make sure that the curve's one end extends to the output level 18 and it crosses the demand curve.) Carefully follow the instructions above, and only draw the required objects. Price of Honey ($) 20.00- 18.00- 16.00- 14.00- 12.00- 10.00- 8.00- 6.00- 4.00- 2.00- 0.00+ 0 2 4 8 10 12 14 Quantity of Honey 6 S=MCp D=MB 16 18 20

Economics: Private and Public Choice (MindTap Course List)
Economics: Private and Public Choice (MindTap Course List)
16th Edition
ISBN:9781305506725
Author:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Publisher:James D. Gwartney, Richard L. Stroup, Russell S. Sobel, David A. Macpherson
Chapter5: Difficult Cases For The Market And The Role Of Government
Section: Chapter Questions
Problem 10CQ
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The diagram to the right shows the perfectly competitive market for honey. The demand curve shows the marginal benefit to society of consuming an extra unit of honey. The supply curve shows the marginal costs of producing an extra unit of honey. However, suppose that, as a by-product to producing honey, honeybees pollinate flowers, allowing more flowers to grow and bloom. Suppose that for each unit of honey produced, one unit of flowers is also created, providing an external benefit of $6. Use the line drawing tool to draw and label the social marginal cost curve. (Make sure that the curve's one end extends to the output level 18 and it crosses the demand curve.) Carefully follow the instructions above, and only draw the required objects. C Price of Honey ($) 20.00- 18.00- 16.00- 14.00- 12.00- 10.00- 8.00- 6.00- 4.00- 2.00- 0.00- 0 -N 2 4 6 8 10 12 14 Quantity of Honey S = MCp 16 D = MB 18 20
Transcribed Image Text:The diagram to the right shows the perfectly competitive market for honey. The demand curve shows the marginal benefit to society of consuming an extra unit of honey. The supply curve shows the marginal costs of producing an extra unit of honey. However, suppose that, as a by-product to producing honey, honeybees pollinate flowers, allowing more flowers to grow and bloom. Suppose that for each unit of honey produced, one unit of flowers is also created, providing an external benefit of $6. Use the line drawing tool to draw and label the social marginal cost curve. (Make sure that the curve's one end extends to the output level 18 and it crosses the demand curve.) Carefully follow the instructions above, and only draw the required objects. C Price of Honey ($) 20.00- 18.00- 16.00- 14.00- 12.00- 10.00- 8.00- 6.00- 4.00- 2.00- 0.00- 0 -N 2 4 6 8 10 12 14 Quantity of Honey S = MCp 16 D = MB 18 20
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