Question

Write the difference between Private cost and Social cost​

Answer 1

Answer:

Private costs are paid by the firm or consumer and must be included in production and consumption decisions. ... Social costs include both the private costs and any other external costs to society arising from the production or consumption of a good or service.

Explanation:

dear you can take points from the article.

Answer 2

From an economic point of view,private costs are the production or manufacturing cost incurred by the firms or companies through out the production process or the consumption cost while making any consumption decision.

Social cost basically includes the cost or impact on the overall society due to various production or consumption activities.

Explanation:

• In Economics,private cost only includes the cost or expense that is related with the production or consumption activities without consideration to the broader society.It includes the overall production or manufacturing cost or expense incurred by any firm or company during the production of any product or service which commonly includes labor cost,capital/physical input cost,maintenance expenses and so forth.From the perspective of consumption,any cost or expense incurred while making purchase or consumption decision by consumers or buyers are also considered as private cost.Hence,private cost does not include any cost or expense that is passed on to the society due to any economic activities.
• External cost includes the cost or expense of any economic or commercial activities or practices on the overall society which are not reflected in the accounting statements of any firm or company or not recognized by consumers either.Examples of external costs are any unrecognized externality cost such as pollution,road congestion,spread of diseases on society due to economic or commercial conducts.
• Social cost is a combination of both the private cost and external cost in the society and it therefore,measures any external and unrecognized impacts of the production and consumption activities which are not registered in the private cost.Social cost extends the concept of private cost by including the external cost and reflects a relatively broader concept of cost in Welfare Economics.Hence,private cost does not include the welfare considerations of the economic activities which are accounted by the social cost.