Social cost:
Social cost of production refers to the cost incurred by a society when its economic resources are used to produce a given commodity. The usage of a society’s resources to produce a given commodity implies sacrificing the production of some other commodities. This is termed the opportunity cost of production. The social cost of production is normally stated in terms of marginal social cost, which simply means the increment in total cost of the entire society. It must be borne in mind that the social cost of production may be higher than private cost because other consequential effects of productive activities are considered (examples are water and air pollution, environmental degradation, etc). For example, a mining firm may degrade the environment in course of its production activities.