Consider a beekeeper. The beekeeper has the following production function where the input is the number of hives and the output is quantity of honey produced. Beehives 1 2 3 4 5 6 7 8 9 10 11 Honey 12 23 33 42 50 57 66 71 75 78 80 The cost of installing a beehive is $100 and the price of a unit of honey (whatever that is...) is $20. Also each beehive increases the output of apples at a nearby apple orchard by $40. 4. Go back to assuming that the beehives and the orchard are owned by different people. Let's say we want to get the efficient quantity by putting a subsidy on beehives. How much should it be per hive?
Consider a beekeeper. The beekeeper has the following production function where the input is the number of hives and the output is quantity of honey produced.
Beehives 1 2 3 4 5 6 7 8 9 10 11
Honey 12 23 33 42 50 57 66 71 75 78 80
The cost of installing a beehive is $100 and the price of a unit of honey (whatever that is...) is $20. Also each beehive increases the output of apples at a nearby apple orchard by $40.
4. Go back to assuming that the beehives and the orchard are owned by different people. Let's say we want to get the efficient quantity by putting a subsidy on beehives. How much should it be per hive?
5. What if we wanted to subsidize honey instead? How much should that subsidy be per unit? (Round to one decimal place.)
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