when determining the marginal social cost both fixed and variable costs must be accounted for fixed costs are those that don t fluctuate such as salaries or startup costs variable costs on the other hand change for example a variable cost could be a cost that changes based on production volume 1
the issue with quantificationmarginal social cost is an economic principle that packs a major global punch though it is incredibly difficult to quantify in tangible dollars costs incurred by acts of production such as operational costs and money used for startup capital are fairly simple to calculate in tangible dollars the issue comes when the far reaching effects of production must also be factored in such costs are difficult if not impossible to pin down with an exact dollar amount and in many instances no price tag can be affixed to the effect the importance with marginal social cost then is that the principle can be used to aid economists and legislators to develop an operating and production structure that invites corporations to cut down on the costs of their actions related conceptsmarginal social cost is related to marginalism a concept that works to determine the amount of extra use derived from the production of one additional unit the effects of the extra units on supply and demand are also studied marginal social cost can also be compared to the marginal benefit the principle that determines the amount that consumers will give up to gain one extra unit 