Private cost - A producer's or supplier's cost of providing goods or services.

It includes
internal costs incurred for inputs, labor, rent, and depreciation but excludes external costs
incurred as environmental damage (unless the producer or supplier is liable to pay for them).

Private benefit- Monetary gains derived by holders of large percentages of the stock of
a company, arranged by outvoting smaller shareholders. Changes to company
policies or business decisions resulting in private benefits for large shareholders may or may not
be detrimental to the value of the company itself.

Social cost - The expense to an entire society resulting from a news event, an activity or
a change in policy. When assessing the overall impact of its commercial actions in terms of social
costs, a socially responsible business operator should take into account its
own production expenses, as well as any indirect expenses or damages borne by others.

Social benefit - The increase in the welfare of a society that is derived from a particular course of
action. Some social benefits, such as greater social justice, cannot easily be quantified.

Marginal social cost - Incremental cost of an activity as viewed by the society, and expressed as
the sum of marginal external cost and marginal private cost.


Marginal social benefit - Incremental benefit of an activity as viewed by the society, and
expressed as the sum of marginal external benefit and marginal private benefit.


Marginal private cost - Marginal cost incurred by a household (or business) in
actually consuming (or producing) a good.


Marginal private benefit - Marginal benefit enjoyed by a household (or business) in
actually consuming (or producing) a good.
External cost - An external costs occurs when producing or consuming a good or service imposes
a cost upon a third party. If there are external costs in consuming a good (negative
externalities), the social cost will be greater than the private cost. The existence of external
costs can lead to market failure. This is because the free market generally ignores the existence
of external costs.
External benefit - An external benefit occurs when producing or consuming a good causes a
benefit to a third party. The existence of external benefits (positive externalities) means that
social benefit will be greater than private benefit. In a free market, goods with external benefits
can often be under-consumed because the free market ignores the external benefit to others.