Microeconomics
Microeconomics
Give an example that illustrates the difference between private costs and social costs.
Example that illustrates the private cost and social cost.
The difference between the private cost and the social cost is the private cost that is only included with the cost of the producer. However, the social cost is included with both private cost and cost of externality. For example, a manufacturing chemical industry that incurs $100,000 for producing a particular quantity of chemicals. Definitely, the production of chemicals creates pollution in the environment and create external cost...
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