Private cost & social cost deffirent
Answers
Explanation:
The social costs are the costs incurred by the society as a whole. These are the private costs plus any costs borne by the rest of the society. So social costs are higher than private costs when firms are able to escape some of the economic costs of production. Such a situation is called negative externalities. For example, a firm releasing untreated waste into air imposes a cost on the society in the form of, say, breathing ailments or higher cleaning bills in respect of the third parties that is not reflected in the cost of the firm itself. Similarly, noise pollution, water pollution etc. are examples of social costs. Private costs can be made equal to social costs by public regulation that requires the firm to install anti-pollution equipment.