what does marginal social cost mean 
marginal social cost msc is the total cost society pays for the production of another unit or for taking further action in the economy the total cost of the production of an additional unit of something is not merely the direct cost undertaken by the producer but also includes costs to other stakeholders and the environment as a whole msc is calculated as marginal social cost mpc mec where mpc marginal private cost mec marginal external cost positive or negative begin aligned text marginal social cost text mpc text mec textbf where text mpc text marginal private cost text mec text marginal external cost positive or negative end aligned marginal social cost mpc mecwhere mpc marginal private costmec marginal external cost positive or negative understanding marginal social cost mscmarginal social cost reflects the impact that an economy feels from the production of one more unit of a good or service marginal social cost exampleconsider for example the pollution of a town s river by a nearby coal plant if the plant s marginal social costs are higher than the plant s marginal private costs the marginal external cost is positive and results in a negative externality meaning it produces a negative effect on the environment the cost of the energy that is produced by the plant involves more than the rate that the company charges because the surrounding environment the town must bear the cost of the polluted river this negative aspect must be factored in if a company strives to maintain the integrity of social responsibility or its responsibility to benefit the environment around it and society in general costs of marginal social cost