Final answer:
In business combinations, additional costs include both private and external costs, such as pollution, stress on workers, and restructuring. These costs affect not only the firms but also third parties and the environment, and can be challenging to asses objectively.
Step-by-step explanation:
Additional costs incurred in business combinations, whether through merger or acquisition, encompass a variety of social costs. These costs are not just the private costs absorbed by the firms involved, but also the additional external costs that affect third parties outside of the production process. An example is increased pollution, which represents a social cost as it impacts the community and environment.
Moreover, these combined businesses may face costs related to duplication of services, such as maintaining two accounting or sales departments, which leads to a need for restructuring. The process of integrating different organizational cultures, technologies, and staff can induce stress on workers and lead to additional costs in terms of workforce reduction or retraining programs. In essence, economic theory suggests that a business combination should consider internalizing these externalities, though the actual cost to stakeholders, like nature and the broader society, is difficult to measure objectively.