Socially optimal firm size is how big a business should be to do the best job it can do and benefit the most people. Generally, businesses should not be too big or too small. They need to have the right amount of workers and other resources like money and materials to do their job well and help out the most people. Too big and the business might waste money or not use its resources efficiently. Too small and it might not have the resources it needs to do its job properly. So social optimal firm size means finding the amount of workers and other resources that will help the business do its job the best way and help out the most people.