Difference between revisions of "Deadweight loss"

Revision as of 19:51, August 17, 2010

i was insipired to valdalize by your essay moronic vandalism by the tolerant. just sayin

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-'''Deadweight loss''' is an [[economic]] loss to the public without any offsetting gain.
+i was insipired to valdalize by your essay moronic vandalism by the tolerant. just sayin
-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 loss represents the extra value that consumers obtain goods and services that is worth more to them than the price they paid.  For example, you may buy lunch for $10 but you may be so hungry that it is really worth $15 to you.  If the price of that lunch were raised by a monopoly to $16, then you wouldn't buy the lunch and your individual "deadweight loss" from that monopoly price would be $5 compared to the free market.
-In other words, the deadweight loss is due to the loss in value to society of output not produced.
-[[Category:Economics]]