# Deadweight Loss Calculator

URL: https://speedycalculator.com/calculators/finance/deadweight-loss/
Last updated: 2026-10-25

> The deadweight loss calculator works out the loss of total surplus caused by a tax, price ceiling, price floor or monopoly – the triangle between the supply and demand curves for the units no longer traded.

## Inputs

- Equilibrium quantity
- Quantity after intervention
- Price paid by buyers
- Price received by sellers

## Results

- Deadweight loss
- Price wedge
- Tax revenue (if a tax)

## Formula

```
Deadweight loss = ½ × (price buyers pay − price sellers receive) × (equilibrium quantity − new quantity)
For a tax: DWL = ½ × tax per unit × reduction in quantity
```

## Explanation

Deadweight loss is value that disappears entirely – neither consumers, producers nor the government gets it. It is larger when demand and supply are more elastic.

### How to use the Deadweight Loss Calculator

- **Equilibrium quantity**
- **Quantity after intervention**
- **Price paid by buyers**
- **Price received by sellers**

Results update as you type, and every field accepts the units shown in its menu.

### How it works

Enter the equilibrium quantity, the quantity after the intervention, and the price buyers pay and sellers receive after it.

### Tips

- Use real (inflation-adjusted) figures to compare across years.
- Check whether data are seasonally adjusted.
- Use the same currency and base year throughout.
- Economic models simplify reality – treat results as illustrations, not forecasts.

### Common mistakes to avoid

- Mixing nominal and real values.
- Comparing percentage changes with percentage-point changes.
- Treating correlations as causes.

### Inputs explained

FieldWhat to enterEquilibrium quantityA numberQuantity after interventionA numberPrice paid by buyersAmount in your currencyPrice received by sellersAmount in your currency

### What each result means

- **Deadweight loss** = 0.5×abs([Price paid by buyers] - [Price received by sellers])×abs([Equilibrium quantity] - [Quantity after intervention])
- **Price wedge** = abs([Price paid by buyers] - [Price received by sellers])
- **Tax revenue (if a tax)** = abs([Price paid by buyers] - [Price received by sellers])×[Quantity after intervention]

### Example values

How the main result changes when **Equilibrium quantity** changes and everything else stays at the example values above:

Equilibrium quantityDeadweight loss500450750751,0003001,2506751,5001,0502,0001,800

## Worked example

Inputs — Equilibrium quantity: 1,000; Quantity after intervention: 800; Price paid by buyers: $12; Price received by sellers: $9.

Results — **Deadweight loss = $300.00**; Price wedge = $3.00; Tax revenue (if a tax) = $2,400.00.

## FAQ

**What is deadweight loss?**
The loss of total welfare when trades that would benefit both sides don't happen.

**What causes deadweight loss?**
Taxes, subsidies, price controls and monopoly pricing.

**Does a bigger tax cause more deadweight loss?**
Yes – roughly with the square of the tax.

**What formula does the Deadweight Loss Calculator use?**
Deadweight loss = ½ × (price buyers pay − price sellers receive) × (equilibrium quantity − new quantity).