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Managerial Economics · End Term · 31 Aug 2025 · May 2025 term · Set QDB3

Question 29: A beekeeper lives adjacent to an apple orchard. The orch…

Question 29

+2 marksNumerical answer

A beekeeper lives adjacent to an apple orchard. The orchard owner benefits from the bees because each hive pollinates about one acre of apple trees. The orchard owner pays nothing for this service, however, because the bees come to the orchard without his having to do anything. Because there are not enough bees to pollinate the entire orchard, the orchard owner must complete the pollination by artificial means, at a cost of $10 per acre of trees.

Beekeeping has a marginal cost MC=10+5QMC = 10 + 5Q, where QQ is the number of beehives. Each hive yields $30 worth of honey.

Based on the above data, answer the given subquestions.

What should be the socially efficient number of hives that the beekeeper should maintain ____________

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Correct answer: 6

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Question 29 of 43 in the IIT Madras BS Managerial Economics (Managerial Economics) End Term paper sat on 31 Aug 2025, in the May 2025 term (IIT M IMPROVEMENT FN EXAM QIA1 31 Aug 2025). It carries 2 marks.

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