Deadweight Loss Calculator

Formulas

The formula used in the calculation is:

\[ \text{DWL} = \frac{1}{2} (\text{Pc} - \text{Pp}) (\text{Qe} - \text{Qt}) \]

Description

This calculator computes the deadweight loss in a market based on the input values of original and new prices and quantities. Deadweight loss represents the loss of economic efficiency that occurs when the equilibrium for a good or service is not achieved or is not achievable.

Example Calculation

Let's assume the following:

Original Price (Pp): $10.00
New Price (Pc): $12.00
Original Quantity (Qe): 100 units
New Quantity (Qt): 80 units

Calculate the deadweight loss:

\[ \text{DWL} = \frac{1}{2} (12.00 - 10.00) (100 - 80) = \frac{1}{2} \times 2.00 \times 20 = 20.00 \]

Therefore, the deadweight loss for this example is $20.00.