When a beekeeper places his hives of bees in an orchard so that the bees can gather nectar to produce honey,the bees pollinate the orchard,which increases the yield of fruit.What is the economic explanation of this activity
A)It creates a positive externality because orchard owners can charge the beekeeper a fee for the use of his orchard.
B)It creates a negative externality because the bees are a hazard to the orchard owner.
C)It creates a positive externality because both parties can benefit from this activity.
D)It creates a negative externality because one party may benefit from it but the other party may suffer a loss.

Question

Quizplus · Accepted Answer

This activity creates a positive externality because both the beekeeper and the orchard owner can benefit from it. The beekeeper benefits by collecting nectar to produce honey, while the orchard owner benefits from increased yield of fruit due to pollination. This is a mutually beneficial activity, creating positive externalities for both parties involved.

When a Beekeeper Places His Hives of Bees in an Orchard