Difference between revisions of "Deadweight loss"
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| − | + | '''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 06:18, November 25, 2007
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.