What is a "social cost" of production? a. the total costs, both implicit and explicit, of producing the product b. the cost of the natural resources used in production c. the cost of environmental damage caused by production d. the sum of all costs to individuals in society, regardless of who bears the costs of production

The correct answer is option D.

Explanation:

The social cost of production is the total cost incurred in the process of production b the society as a whole, irrespective of who bears the cost.

In the production process, sometimes external costs are involved. These costs are borne by third parties. The social cost is the sum of private costs and external costs incurred in the production process.

For instance, the cost of disutility caused b pollution will not be included in private cost but it is a social cost.

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