Principles of Macroeconomics / Unit 2 MAC 0128 short lesson, about 20 seconds
Deadweight Loss
Captions available
The idea
Deadweight loss is the social surplus destroyed when a market trades a quantity other than the equilibrium one, because trades both sides wanted are blocked.
In practice
A binding control moves some surplus from one side to the other and destroys the rest.
Where people slip
The transfer and the loss are different things. The transfer changes who gains; the loss belongs to nobody.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
Builds on
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