The statement "the social optimal output occurs where Marginal Social Benefits (MSBs) equal Marginal Social Cost (MSCs)" is a fundamental concept in economics known as the efficient allocation of resources. It suggests that for a given economic activity or production level, the ideal outcome from a societal perspective is achieved when the additional benefits generated by producing one more unit of a good or service (MSBs) are equal to the additional costs incurred (MSCs) in producing that unit.