Enter Q1, Q2, P1, and P2 into this deadweight loss calculator to determine the total deadweight loss of a good or service.

Deadweight loss formula

Deadweight loss = 1/2 * (Q2-Q1)*(P2-P1)

  • Where Q1 is the current quantity the good is being produced at
  • Q2 is the quantity of good at equilibrium
  • P1 is the price of the good at Q1
  • P2 is the price of the good at Q2

Deadweight Loss Definition

Deadweight loss is defined as the loss of economic efficiency when a product or service is not socially available in the optimal quantity.

How to calculate deadweight loss?

How to calculate deadweight loss?

  1. First, determine the quantity of the good.

    Measure the current quantity of the good and the quantity of the good at equilibrium.

  2. Next, determine the price of the good at both points.

    Measure the price of the good a the current quantity and the optimal quantity.

  3. Finally, calculate the deadweight loss.

    Using the formula above, calculate the deadweight loss.

FAQ

What is deadweight loss?

Deadweight loss is defined as the loss of economic efficiency when a product or service is not socially available in the optimal quantity.