[ojc02]

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How is a price higher than the second-best solution not a problem?

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Well you are the one who seems to think it is, do elaborate.

What do you mean by "second best solution"?

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First-Best-Solution --> Price = Marginal Cost --> Not Feasible due to negative profits

Second-Best-Solution --> Price = Average Cost --> Maximizes Overall Welfare

Price higher than that creates the so called dead-weight-loss of monopoly pricing hence the argument for government regulation

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I don't think this is quite right. When price = marginal cost, opportunity costs are included so accounting profit is still positive but economic profit is zero by definition.

I think price being equal to marginal cost is not possible because perfect competition never occurs, it's a theoretical limit that is never reachable.