The social (or true) cost of producing a good is derived by
A) adding external cost to private cost
B) subtracting private cost from external cost
C) subtracting external cost from private cost
D) measuring private cost alone
E) measuring external cost alone

Question

Quizplus · Accepted Answer

The social cost of producing a good includes both the private cost incurred by the producer and any external costs (negative externalities) that production imposes on others not involved in the transaction.

The Social (Or True) Cost of Producing a Good Is