I've done economics for 3 months only, so bear with me.
If Social Benefit = Private Benefit + External Benefit
Then how is it physically possible that private benefit could ever exceed social benefit?
Someone told me that if there is an External Cost this reduces the social benefit, but why? If the Social Cost already takes the External Cost into account, why would the Social Benefit do the same?
If the Social Benefit and Social Cost are two different things then why do they both take into account costs and benefits?
I really do not understand the logic behind it and do not understand my teacher's explanation. Much help is needed.