Graph 10-3 This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey bees.
-Refer to Graph 10-3.At the private market outcome, quantity Q₁ represents the:
A)quantity of kiwifruit consumers will buy
B)quantity of kiwifruit and honey consumers will buy
C)socially optimal quantity of kiwifruit that should be produced
D)optimal price of a kiwifruit from the standpoint of society as a whole

Question

Graph 10-3  This graph reflects the market for kiwifruit, where pesticide used by kiwifruit orchardists also unintentionally kills honey bees.
-Refer to Graph 10-3.At the private market outcome, quantity Q₁ represents the:
A)quantity of kiwifruit consumers will buy 
B)quantity of kiwifruit and honey consumers will buy 
C)socially optimal quantity of kiwifruit that should be produced 
D)optimal price of a kiwifruit from the standpoint of society as a whole

Quizplus · Accepted Answer

The private market outcome, represented by the point where the demand and supply curves intersect, shows the quantity of kiwifruit that consumers are willing and able to buy at the prevailing market price, without taking into account the negative externalities of the pesticide use on honey bee populations. Therefore, quantity Q₁ only represents the quantity of kiwifruit consumers will buy, and not the socially optimal quantity that takes into account the negative impact on honey bees.

Graph 10-3 This Graph Reflects the Market for Kiwifruit