Finance

Deadweight Loss Calculator

Calculate the economic inefficiency (deadweight loss) from taxes, price controls, or monopoly pricing.

Formula (Triangle):
DWL = ½ × |Price Change| × |Quantity Change|
Tax Revenue = Tax × New Quantity
Total Welfare Loss = DWL (transactions that no longer happen)

What is Deadweight Loss?

Deadweight loss represents the economic value of transactions that don't occur because of market distortions like taxes, price controls, tariffs, or monopoly pricing. It's the triangle on a supply-demand graph between the old and new equilibrium.