Social costs refer to the total costs of an activity or decision that affect society as a whole, beyond just the private costs incurred by individuals or businesses. These costs can include negative impacts on the environment, public health, and community well-being. For example, pollution from a factory not only affects the company’s expenses but also harms the health of nearby residents and degrades local ecosystems. When evaluating policies or projects, understanding social costs is crucial for making informed decisions. Policymakers often consider these costs to ensure that the benefits of an action outweigh its negative effects on society. This approach helps promote sustainable development and social welfare.