Yunwei Gai
Abstract
Abstract Deadweight loss is the net loss of total (consumer plus producer) surplus. It is a result of inefficient resource allocation when the marginal cost of production is not equal to the marginal benefit of the demand. It represents a welfare loss that is not captured by either consumers or suppliers, hence the name “deadweight” loss.
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Abstract Deadweight loss is the net loss of total (consumer plus producer) surplus. It is a result of inefficient resource allocation when the marginal cost of production is not equal to the marginal benefit of the demand. It represents a welfare loss that is not captured by either consumers or suppliers, hence the name “deadweight” loss.
Key concepts: Deadweight loss, Economic surplus, Economics, Welfare, Production (economics), Marginal cost, Microeconomics, Market economy