Positive production externalities are a smaller problem than negative ones. But they pose interesting problems. A notable one arises in the production of fruit and vegetables and honey. To produce honey, beekeepers locate their hives next to fruit orchards and vegetable farms. The honeybees collect pollen and nectar from the fruit and vegetable blossoms to make the honey. At the same time, they transfer pollen between the blossoms, which helps to fertilize the blossoms. Two positive production externalities are present in this example. Honey producers get a positive production externality from the owners of the orchards and farms; and the fruit growers and vegetable farmers get a positive production externality from the honey producer.

Positive production externality.