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Price–Quantity Welfare Loss Calculator

Estimate a triangular deadweight loss from price and quantity changes.

  • Formula & worked example
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Calculator inputs

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How to use this calculator

  1. Enter the known values in the units shown. Results update as you type.
  2. Edit a calculated value to solve backwards, or lock a value to hold it fixed.
  3. Use the worked example to check the method. Reset restores the starting fields.

Use the result with context

Results are estimates for planning and education. Confirm rates, taxes, fees, and legal requirements with the relevant institution or a qualified professional before making a financial decision.

Formula and method

Multiply the price increase by the reduction in quantity and divide by two. A price change from 10 to 12 and quantity change from 100 to 80 gives a triangular loss estimate of 20.

Triangular loss = (new price − original price) × (original quantity − new quantity) ÷ 2

Worked example

Enter these known values and leave the other values blank.

Original price
10 USD /unit
New price
12 USD /unit
Original quantity
100 units
New quantity
80 units
Deadweight loss
20 USD

Assumptions and limitations

  • Use values from a consistent period, scope and currency. The stated formula defines this simplified model; the explanation describes quantities it leaves out.

Common questions

When is the triangular approximation appropriate?

It assumes the relevant welfare-loss region can be represented as a triangle. More complex supply, demand or policy effects require a fuller model.

References

The calculation equations, inverse formulas, units, and input rules were imported from this source. Bookify provides the interface and equation solver.

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