Private costs are the costs borne solely by the individuals or firms that incur them. These costs include both explicit costs (such as wages, rent, and materials) and implicit costs (such as the opportunity cost of using resources in one way rather than another). Private costs do not include any external costs that are imposed on third parties.

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Private Costs Are

Question 48

Multiple Choice

Private costs are

A) external costs borne by private firms.
B) explicit costs rather than implicit costs.
C) costs borne by private members of society rather than governmental bodies.
D) costs borne solely by the individuals who incur them.

Correct Answer: