The net loss in economic welfare that is caused by a tariff or other source of distortion, defined as the total losses to those who lose, minus the total gains to those who gain. Usually identified in a supply-and-demand diagram in terms of change in consumer and producer surplus together with government revenue. The net of these appears as one or two welfare triangles.
the loss in producer and consumer surplus due to an inefficient level of production.
the reduction of consumer surplus without a corresponding increase in monopoly profit when a perfectly competitive firm is monopolized
a loss in the total utility of an economy
The decrease in consumer surplus and producer surplus that results from an inefficient level of production. (p. 144)
A measure of allocative inefficiency - the reduction in consumer and producer surplus resulting from restricting output below its efficient level.
The total surplus lost relative to an efficient market due to market imperfections, taxes, or other factors.
Deadweight loss is a measure of inefficiency. It is equal to the loss in total surplus ( consumer surplus plus producer surplus) when output is below or above its efficient level. Generally, these market inefficiencies are attributable to market imperfections created by market power, taxes, regulations, or other factors.
In economics, a deadweight loss (also known as excess burden) is a loss of economic efficiency that can occur when equilibrium for a good or service is not Pareto optimal. In other words, either people who would have more marginal benefit than marginal cost are not buying the good or service or people who would have more marginal cost than marginal benefit are buying the product.
