Deadweight Loss from Private Provision of Excludable Min's Music (Figure 10.8)
Figure 10.8 illustrates that when the excludable 'Min's Music' program is privately provided at a price of $6, a deadweight loss occurs. This pricing strategy reduces the audience from the Pareto-efficient level of 10,000 listeners to just 6,000. Although the broadcaster now earns revenue, the total social benefit—which is the sum of the broadcaster's revenue and the remaining listeners' surplus—is less than the maximum possible benefit. This reduction in total surplus represents the deadweight loss.
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Ch.10 Market successes and failures: The societal effects of private decisions - The Economy 2.0 Microeconomics @ CORE Econ
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