Costs and benefits: private and external

Private cost Private benefit

Private costs and
Cost ofprivate
land benefits of an activity: when a private business
or individual pays
Cost of the price and benefits from the returns of activity. e.g. if
construction
a private company builds a chemical factory, the cost of buying the land is
Labour costs
paid for by theexpenditure
Revenue business, not external stakeholders. The profit made by
thatmaterials
Transporting factory is and
kept by the private individual(s).
finished goods
External costs External benefits

External costs and external benefits are those experienced by the rest of