The cost on factors of production which are neither hired not bought by the firm is called _________.

Social cost

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Opportunity cost

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Economic cost

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Surcharged cost

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Solution

The correct option is B Social cost
The social cost is known as the third party cost as it is not incurred by the primary parties (buyer and seller) but rather incurred by the society as a whole. An example is a firm generating toxic fumes as a result of their production process.

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The cost on factors of production which are neither hired not bought by the firm is called _________.

The correct option is B Social costThe social cost is known as the third party cost as it is not incurred by the primary parties (buyer and seller) but rather incurred by the society as a whole. An example is a firm generating toxic fumes as a result of their production process.

The correct option is B Social cost
The social cost is known as the third party cost as it is not incurred by the primary parties (buyer and seller) but rather incurred by the society as a whole. An example is a firm generating toxic fumes as a result of their production process.