In fact, private medical costs have been increasing at the same rate as Government health costs.

The marginal private cost shows the cost associated to the firm in question.

Social cost in economics may be distinguished from "private cost".

Social cost is also considered to be the private cost plus externalities.

If there is a negative externality, then social costs will be greater than private costs.

For simplicity, we assume that marginal private costs are constant.

There are two reasons why society might consider that the social cost of a capital good is less than its private cost.

Finally, the government accepted the distinction between private and social costs.

The private and social costs of pollution and the international response to global warming are explored.

As a result, the private cost of the product or service will better reflect its social cost.