Accounting costs or explicit costs are the payments made by the entrepreneur to the suppliers of various productive factors. The accounting costs are only those costs, which are directly paid out or accounted for by the producer i.e. wages to the labourers employed, prices for the raw materials purchased, fuel and power used, rent for the building hired for the production work, the rate of interest on the borrowed capital and the taxes paid.

(i) Private cost is the cost incurred by a firm for production. It includes both implicit costs and explicit costs.
(ii) Social costs are those costs, which are not borne by the producing firm but are incurred by others in society. For example, when an oil refinery discharges its waste in the river causing water pollution, such a pollution results in tremendous health hazards which involve costs to the society as a whole.

(i) It refers to the total cost borne by the social due to the production of a commodity.
(ii) Social cost is the cost that is not borne by the firm, but incurred by others in the society.
(iii) For example: Large business firms create air pollution etc.
(iv) It is also called as External cost.

(i) In the long run all factors of production become variable.
(ii) The size of the firm can be increased.
(iii) There are no fixed inputs in the long run

LAC = LTC/Q
(iv) It is the locus of points denoting the least cost curve of producing the corresponding output.
(v) The LAC curve is called as 'Plant curve' or Boat shape curve or planning curve or envelope curve.

Marginal revenue is the addition to the total revenue by the sale of an additional unit of a commodity. It is got by dividing change in TR by the change in quantity sold.
\(M R=\frac{\Delta T R}{\Delta Q}\), where MR = Marginal revenue.
\(M R=T R_{n}-T R_{n-1} \quad \Delta T R=\text { change in total revenue. }  \)
\(M R=T R_{n+1}-T R_{n} \quad \Delta Q=\text { change in total quantity. }  \)
\(T R_{n}=\text { total revenue of } n^{\text {th }} \text { item }  \)
\(T R_{n-1}=\text { total revenue of } n-1^{\text {th }}  item\)
\(T R_{n+1}=\text { total revenue of } n+1^{\text {th }}item\)