Deadweight Loss Calculator
Enter linear demand and supply, choose a policy — per-unit tax, price ceiling, or price floor — and the calculator returns the resulting deadweight loss along with the other welfare outcomes.
One tile of the full market analysis unit.
The course teaches market analysis interactively — drag the graphs, practice with feedback, and spaced reviews bring it back before you forget. Free.
Demand:
Supply:
Free-market
40.00
Free-market
60.00
Quantity after tax
35.00
Buyer price / Seller receives
65.00 / 55.00
Tax revenue
350.00
Incidence (buyer / seller)
5.000 / 5.000
Deadweight loss
25.00
The triangular welfare loss: surplus that existed at the competitive equilibrium and is now gone.
What the course adds
Beyond this one page
The market-analysis unit shows DWL appearing live as you drag a tax wedge, ceiling, or floor — and adaptive practice keeps the welfare arithmetic sticky long after the chapter ends.
Spaced reviews
FSRS brings every concept back right before you'd forget. ~50% better retention than re-reading.
Per-concept mastery
Performance Factor Analysis tracks each sub-skill separately — you see which version of the idea is still wobbly.
Diagnostic placement
A short test skips you past what you already know. No re-learning the basics.
The formulas
Tax:
Ceiling:
Floor:
Worked example — a 10 dollar tax
Demand: . Supply: . Per-unit tax: .
Free market: ,
After tax:
Buyers pay ; sellers receive
Tax revenue
FAQ
- What is deadweight loss?
- Deadweight loss (DWL) is the reduction in total economic surplus caused by a market intervention or distortion that prevents mutually beneficial trades. Graphically, it is the triangle between the demand and supply curves over the range of units that would have been traded in the competitive equilibrium but are not traded under the distortion.
- What is the formula for deadweight loss from a per-unit tax?
- , where is the per-unit tax, is the competitive equilibrium quantity, and is the quantity traded after the tax. The base of the triangle is the reduction in quantity and the height is the wedge the tax drives between what buyers pay and what sellers receive.
- How does a price ceiling create deadweight loss?
- A binding price ceiling (set below the equilibrium price) causes the quantity supplied to fall below the quantity demanded, producing a shortage. Trade happens only up to the quantity supplied at the ceiling price. The DWL is the triangle between demand and supply over the units that are no longer traded: , where and are the demand and supply prices at .
- How does a price floor create deadweight loss?
- A binding price floor (set above the equilibrium price) raises the price consumers face and reduces quantity demanded below the competitive equilibrium quantity. Producers are willing to supply more at the higher price, but they can only sell what consumers want at that price. The DWL is again a triangle over the lost units of trade, with the same formula as the ceiling case.
- Who bears the burden of a per-unit tax?
- Tax incidence depends on the relative elasticity of demand and supply. The side that is more inelastic bears a larger share of the tax. Statutory incidence — who formally pays the tax — does not affect economic incidence: a tax on buyers and an equivalent tax on sellers yield the same Qt, same price wedge, and same DWL.
For instructors
Assign this to your class
Free, no account needed for students. Paste either snippet into Canvas, Moodle, Blackboard, Google Classroom, or your slide deck.
Sends students to the full page with the worked example and related lessons.
Inlines just the interactive widget in your LMS — no nav, no footer, no signup wall.
Want to see the DWL triangle appear as you move the curves?
Econ Academy's welfare lesson includes interactive graphs for taxes, ceilings, and floors. Shift the sliders and watch DWL grow or shrink in real time.