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?

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
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**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:
  - At a cost of $10 per acre of trees
  - Beekeeping has a marginal cost \( MC = 10 + 5Q \)
    - where \( Q \) is the number of beehives.
  - Each hive yields $40 worth of honey.

**Questions:**

(d) Is a Beekeeper a Price-Taker or a Price-Maker?

(e) Why?
Transcribed Image Text:**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: - At a cost of $10 per acre of trees - Beekeeping has a marginal cost \( MC = 10 + 5Q \) - where \( Q \) is the number of beehives. - Each hive yields $40 worth of honey. **Questions:** (d) Is a Beekeeper a Price-Taker or a Price-Maker? (e) Why?
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