Which of the following is true of private costs?
A)Are borne by consumers of a good while social costs are borne by government.
B)Are borne by producers of a good while social costs are borne by government.
C)Are borne by producers of a good while social costs are borne by society at large.
D)Are borne by producers of a good while social costs are borne by those who cannot afford to purchase the good.

Question

Quizplus · Accepted Answer

Private costs are costs that are directly borne by producers of a good, including the cost of production, labor, and materials. Social costs, on the other hand, include any additional costs that are not reflected in the price of the good, such as pollution, congestion, and negative health effects. These costs are borne by society at large, and not just the producers and consumers of the good. Therefore, choice (C) correctly describes the relationship between private costs and social costs.

Which of the Following Is True of Private Costs