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| − | '''Deadweight loss''' is an [[economic]] loss to the public without any offsetting gain.
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| − | 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).
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| − | 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.
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| − | In other words, the deadweight loss is due to the loss in value to society of output not produced.
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| − | [[Category:Economics]]
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