Question
How does a dual positive externality lead to an underallocation of resources? I have the following question to answer: An apple grower's orchard provides nectar
How does a dual positive externality lead to an underallocation of resources?
I have the following question to answer: An apple grower's orchard provides nectar to a neighbour's bees, while the beekeeper's bees help the apple grower by pollinating his apple blossoms. How would you characterize such a situation? Explain why this situation might lead to an under-allocation of resources to both apple farming and beekeeping.
It's not clear to me at how this situation leads to an underallocation of resources. In addition, I've looked at examples and I don't understand why the demand curve is being moved when the demand should be unaffected by this situation? Wouldn't this be the supply curve which being moved as a result of the scenario?
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