A deadweight loss is the decrease in total surplus that results from inefficient underproduction or overproduction. It is a social loss.

The deadweight loss from underproduction equals the area of the gray triangle in Figure 6.9

(a) . That area is

. Can you calculate the deadweight loss from overproduction in Figure 6.9

(b) ?





$22, 500[($15 − $6) × 5, 000 ÷ 2 = $22, 500]



Sources of Market Failure