Question

Bryan's Honey Bee Farm produces honey from bees. Each beehive produces $100 worth of honey per month. Bryan's farm also provides pollination for a local flower farm, increasing its revenues by $100 per month.

What is the socially efficient number of beehives for Bryan to have if all costs and benefits are considered?

Multiple Choice :

A. 4 beehives

B. 3 beehives

C. 2 beehives

D. 1 beehive

Answer 1

The socially efficient number of beehives for Bryan to have is 2 beehives.

Step-by-step explanation:

The socially efficient number of beehives for Bryan to have is 2 beehives. To determine this, we consider the costs and benefits associated with each beehive. Each beehive produces $100 worth of honey per month, resulting in a benefit of $200. Additionally, each beehive provides pollination services, increasing revenues by $100 per month, resulting in a total benefit of $300 per month. If Bryan were to have more than 2 beehives, the costs of maintaining and managing the additional hives would exceed the additional benefits, making 2 beehives the socially efficient number.