Private costs

Question

Private costs

Quizplus · Accepted Answer

Private costs refer to the costs that are directly incurred by producers of a good, such as the cost of labor, raw materials, and equipment. These costs are typically reflected in the price of the good. On the other hand, social costs refer to the costs that are incurred by society at large as a result of producing or consuming the good, such as pollution, congestion, or health problems. These costs may not be reflected in the price of the good and may be borne by individuals or the government. Therefore, private costs are borne by producers of a good while social costs are borne by society at large.

Private Costs