Question

What is the difference between private costs and social costs?

Short answer

The main difference between private costs and social costs is that private cost is the cost incurred by an individual or a firm while social cost consists of both the private costs and any other external costs.

Step-by-step solution

Definitions :

Private cost : It is defined as a cost incurred by a person or a company who is directly involved in a transaction.

Social cost : It is defined as the total of the transaction's private expenses and the costs imposed on consumers as a result of their exposure to the transaction for which they are not paid.

Differences : 

Private Cost	Social Cost
Private cost only includes the cost incurred by a firm or an individual.	Social cost includes private costs as well as the other external costs.
Private cost has nothing to do with society.	Social cost is all about society's loss or benefit.
Example - Private costs of an airport are - 1. Cost of constructing the airport and wages of the workers.	Example - Social costs of the airport are the private costs as well as noise and air pollution, risk of an accident, loss of landscape.