The marginal social cost, MSC, of producing a good or service equals
A) MC + MB.
B) MC + marginal external cost.
C) MB + marginal external benefit.
D) MB + marginal external cost.

Question

Quizplus · Accepted Answer

The marginal social cost (MSC) of producing a good or service is the sum of the marginal cost (MC) to the producer and the marginal external cost to society. This accounts for the total cost of production, including any negative externalities not borne by the producer.

The Marginal Social Cost, MSC, of Producing a Good or Service