ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -The private cost is any cost that a person or firm pays in order to buy or produce goods and services. This includes the cost of labour, material, machinery and anything else that the person of firm pays for. The private cost does not take into account any negative effects or harm caused as a result of the production.

Detailed explanation-2: -The private costs of this (driving a car) include the fuel and oil, maintenance, depreciation, and even the drive time experienced by the operator of the car. Private costs are paid by the firm or consumer and must be included in production and consumption decisions.

Detailed explanation-3: -Private costs are the costs facing individual decision-makers based on actual market prices. Social costs are the private costs plus the costs of externalities. The prices are derived from market prices, where opportunity costs are taken into account.

Detailed explanation-4: -The costs of material, labor, and machinery that the firm must pay to produce the good are called private costs. So, the private cost is borne by the producers. The difference between the total cost to the society and the private cost is the cost of externality (pollution).