In the area of agricultural chemicals, the Environmental Protection Agency requires detailed labeling on cans of pesticides and herbicides. Generally speaking, the industry not only doesn't oppose these labeling requirements, but even supports government-sponsored education programs on how to use these chemicals. Why?

What will be an ideal response?

Government-sponsored education programs about the proper use of pesticides and herbicides reduce the costs for consumers to use these products. Better knowledge about the proper use of these products acts to increase the demand for these goods. Greater demand creates more value for consumers, and the chemical companies can capture some of this greater value in the form of higher profits. These programs may also reduce producer-borne transaction costs stemming from lawsuits that may arise from improper use.