[pvn]

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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'm not sure if English isn't your first language, but I have no idea what you are talking about with "solutions". What alternatives are you even comparing? Where did marginal or average cost get into the equation?

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I'm with him. I have no idea what you're talking about.

How do you measure "overall welfare"?

When you say "best", whose perspective are you considering? Best for person A is often not best for person B.