An apple grower€™s orchard provides nectar to a neighbor€™s bees, while the beekeeper€™s bees help the apple grower by pollinating the apple blossoms. Use Figure 16.2b to explain why this situation of dual positive externalities might lead to an underallocation of resources to apple growing and to beekeeping.
Negative externalities
and positive externalities.

How might this underallocation get resolved via the means suggested by the Coasetheorem?

Transcribed Image Text:

St Positive externalities Dt Underallocation 0 QeQ Positive externalities