Can someone define socialbenefit and marginal social cost since I am confused as to what they mean and represent?
Examples will be appreciated!
Social Benefit and Marginal Social Cost Watch
- Thread Starter
- 15-05-2016 01:02
Offline20ReputationRep:Wiki Support Team
- Wiki Support Team
- 15-05-2016 01:06
The benefit or cost to society of the consumption of one additional unit of a good or service. This isn't always reflected in the price of that good or service.
For example say you buy a car that costs $X to make. That is the cost to the manufacturer - their private cost. However there is a greater cost to society due to the environmental damage caused. That is the social cost.
Similarly, say you go to school and get an education. You benefit from this by some unknown amount. This is your private benefit. However there is a greater social benefit due to society having one more educated individual able to contribute etc.