Graph and explain deadweight loss

Expert Solution

Ans) Deadweightloss is cost to society which no one is receiving. Deadweightloss is created when supply and demand are in disequilibrium. It is a deficiency caused by inefficient allocation of resources. It is loss of total welfare and thus excess burden on the society.

It caused by several reasons like÷ taxes, subsidies, externalities, public good, monopoly, price ceiling etc.

Above graph represents deadweightloss due to monopoly.

Above graph shows deadweightloss due to price floor.

Above graph shows deadweightloss due to price ceiling.

Above graph shows deadweightloss due to tax.

Above graph shows deadweightloss due to positive externality.

Rahul Sunny answered 1 year ago

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Graph and explain deadweight loss

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