Deadweight Loss
Subject: Finance | Topics:

Deadweight Loss is the costs to society created by market inefficiency. Mainly utilized in economics, deadweight loss is applied to any deficiency due to an inefficient percentage of resources. Price ceilings (such as price controls and rent controls), price floors (such as minimum wage as well as living wage laws) and taxation are common said to generate deadweight losses. Deadweight loss comes when supply and demand usually are not in equilibrium.

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