UK0,M<$b@mevgɦmJ8s =-bU#b5')byiDz)%2.&_NKpGtJ|QGdr:>Fj0rA ؞F&!| 4`,mz3[
Student videos

Deadweight Loss of Economic Welfare Explained

  • Levels: AS, A Level, IB
  • Exam boards: AQA, Edexcel, OCR, IB, Eduqas, WJEC

The idea of a deadweight loss relates to the consequences for economic efficiency when a market is not at an equilibrium. The concept links closely to the ideas of consumer and producer surplus.

Deadweight Loss of Economic Welfare Explained

Deadweight loss is relevant to any analytical discussion of the:

Impact of indirect taxes and subsidies
Introduction of maximum and minimum prices
The economic effects of trade tariffs and quotas
Consequences of monopoly power for consumer welfare

But keep in mind:
  1. Taxes are often justified on grounds of market failure
  2. Freely functioning markets often fail to take into account the effects of externalities from production and consumption
  3. Try to analyse the effects of an intervention in terms of the likely net effect on economic and social welfare

Subscribe to email updates from tutor2u Economics

Join 1000s of fellow Economics teachers and students all getting the tutor2u Economics team's latest resources and support delivered fresh in their inbox every morning.

You can also follow @tutor2uEconomics on Twitter, subscribe to our YouTube channel, or join our popular Facebook Groups.

Related Collections

Teaching Vacancies

Recruitment

Advertise your vacancies with tutor2u

Much cheaper & more effective than TES or the Guardian. Reach the audience you really want to apply for your teaching vacancy by posting directly to our website and related social media audiences.

Find our more ›

Advertise your teaching jobs with tutor2u