Difference between revisions of "Deadweight loss"
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'''Deadweight loss''' is an [[economic]] loss to the public without any offsetting gain. | '''Deadweight loss''' is an [[economic]] loss to the public without any offsetting gain. | ||
| − | Specifically, a deadweight loss is the loss in [[efficiency]] that a society suffers as a result of firms setting their [[monopoly]] prices greater than [[marginal cost]] (P > MC). The deadweight loss is due to the loss in value to society of output not produced. | + | Specifically, a [[deadweight]] loss is the loss in [[efficiency]] that a society suffers as a result of firms setting their [[monopoly]] prices greater than [[marginal cost]] (P > MC). The deadweight loss is due to the loss in value to society of output not produced. |
[[Category:Economics]] | [[Category:Economics]] | ||
Revision as of 00:36, February 16, 2009
Deadweight loss is an economic loss to the public without any offsetting gain.
Specifically, a deadweight loss is the loss in efficiency that a society suffers as a result of firms setting their monopoly prices greater than marginal cost (P > MC). The deadweight loss is due to the loss in value to society of output not produced.