Which of the following statement is true in respect of Social cost?

CA Foundation · Business Economics · PYQS · May 2025
Which of the following statement is true in respect of Social cost?
(A) A. Social Cost = Private Cost + External Cost
(B) B. Social Cost = Private Cost + External Cost - Total Negative Externalities
(C) C. Social Cost = Private Cost + External Cost-Government Taxes
(D) D. Social Cost = Private Cost + Total Negative Externalities - Government Taxes

Suggested Answer and Working Notes:

Correct Answer: Option (A)

A. Social Cost = Private Cost + External Cost

Topics: Public Finance

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