Almond growers in CA are very concerned. Normally, honey producers would keep their bees next to almond orchards, where the bees would gather nectar and pollinate the almond trees. Lately however, bee keepers have moved to Arizona where it is cheaper to operate. Without the bees, the almond trees had very low yields, so the cost of production rose and profits were down considerably.
a. Describe the externality in this situation.
b. What possible solution is suggested by the Coase Theorem?
c. Is this solution likely or unlikely to work out in this case? Why or why not?