MPC: MPC (Marginal Private Cost) refers to the cost incurred by an individual or firm in producing an additional unit of a good or service.
MSC: MSC (Marginal Social Cost) represents the total cost borne by society as a whole when an extra unit of a good or service is produced.
Positive Externality: A positive externality occurs when the consumption or production of a good benefits third parties who are not directly involved in the transaction.