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 were:MPC=marginal private costMEC=marginal external cost (positive or negative)