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?
- First, determine the quantity of the good.
Measure the current quantity of the good and the quantity of the good at equilibrium.
- Next, determine the price of the good at both points.
Measure the price of the good a the current quantity and optimal quantity.
- 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.
