The marginal social cost of a good includes the value to consumers of any alternative product of products whose production is reduced or eliminated as a result of the production of an incremental unit of output.

Question

Quizplus · Accepted Answer

Marginal social cost includes not only the direct costs of producing an additional unit of a good or service, but also the costs to society of any alternatives that are forgone or reduced as a result of that production. This can include things like environmental damage, resource depletion, and displacement of other goods or services in the market.

The Marginal Social Cost of a Good Includes the Value