When the private costs and the social costs are NOT the same, there is a(n)

Question

Quizplus · Accepted Answer

When the private costs and social costs are not the same, it means that the production or consumption of the good or service has an impact on a third party who is not involved in the transaction. This is called an externality. For example, if a factory is emitting pollution, the costs of cleaning up that pollution may fall on society as a whole, rather than just the factory owner.

When the Private Costs and the Social Costs Are NOT