Nobel Prize–winning economist James Meade argued that the market for honey was inefficient because pollination is a(n):
private cost of honey production. external benefit of honey production. private benefit of honey production. external cost of honey production.
James Meade argued that the market for honey was inefficient because pollination is an external benefit of honey production.
In this context, pollination by bees not only benefits the honey producers but also provides benefits to other plants and crops that rely on bee pollination. This positive externality means that the social benefits of honey production exceed the private benefits received by honey producers, leading to underproduction of honey in a free market.