November 2, 2008

Deadweight Loss

Posted in Deadweight Loss at 3:04 am by davidprudente

Part of your homework this weekend was to be sure you are able to explain what deadweight loss is and how to find the area of deadweight loss on a graph. Here’s a link about deadweight loss for those of you savvy enough to check the blog. In addition, I’ve clipped in a graph that shows the area of deadweight loss below.

Or you can think of it this way (Link to site):

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4 Comments »

  1. wlaw422 said,

    Mr. Prudente, is there a way to calculate the value of the deadweight loss? Is there some kind of equation the way the midpoint method calculates elasticity? Thank you

  2. davidprudente said,

    Will,

    P * Q of the deadweight loss area.

    • Garrett Hodson said,

      Isnt the deadweight loss calculated by P * Q * .5?

  3. davidprudente said,

    Yes (P*Q)*.5

    Sorry for the omission…great catch.


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