Society's total cost of producing a good _____
A)includes only the private cost to a firm.
B)includes only the external cost.
C)includes all private and external costs.
D)includes the sunk cost and the total variable cost of a firm.
E)includes only the average variable cost of production.

Question

Quizplus · Accepted Answer

Society's total cost of producing a good includes both the private costs borne by the firm (such as labor and materials) as well as any external costs imposed on others (such as pollution or congestion). Therefore, option C - which includes all private and external costs - is the correct answer. The other options do not capture the total cost to society.

Society's Total Cost of Producing a Good _____