Deadweight loss

[Truthmatters]

Deadweight loss - Wikipedia, the free encyclopedia



The reality of markets.

please learn something instead of spouting the same failed talking points

 

[Truthmatters]

Examples





The deadweight loss is the area of the triangle formed by the tax income box, the original supply curve, and the demand curve. This is sometimes called Harberger's triangle.
For example, consider a market for nails where the cost of each nail is 10 cents and the demand will decrease linearly from a high demand for free nails to zero demand for nails at $1.10. In a perfectly competitive market, producers would have to charge a price of 10 cents and every customer whose marginal benefit exceeds 10 cents would have a nail. However if there is one producer who has a monopoly on the product, then they will charge whatever price will yield the greatest profit. For this market, the producer would charge 60 cents and thus exclude every customer who had less than 60 cents of marginal benefit. The deadweight loss is then the economic benefit forgone by these customers due to the monopoly pricing.

Conversely, deadweight loss can also come from consumers buying a product even if it costs more than it benefits them. To describe this, let's use the same nail market, but instead it will be perfectly competitive, with the government giving a 3 cent subsidy to every nail produced. This 3 cent subsidy will push the market price of each nail down to 7 cents. Some consumers then buy nails even though the benefit to them is less than the real cost of 10 cents. This unneeded expense then creates the deadweight loss: resources are not being used efficiently.

If the price of a glass of beer is $3.00 and the price of a glass of wine is $3.00, a consumer might prefer to drink beer. If the government decides to levy a beer tax of $3.00 per glass, the consumer might prefer to drink wine. The excess burden of taxation is the loss of utility to the consumer for drinking wine instead of beer, since everything else remains unchanged. Most notably the tax revenue from this consumer is zero.






Its seems the cons here are affraid of learning things because it will cause their historically failed ideas to be outed for what they really are.

 

[syrenn]

Deadweight loss - Wikipedia, the free encyclopedia



The reality of markets.

please learn something instead of spouting the same failed talking points

I agree.... do take your own advise ...and do the same first.

 

[Truthmatters]

So what did you learn from that example of dead wieght loss?


Or were you incapable of understanding the example?

 

[California Girl]

I was expecting this to be news of the sudden demise of one of our congress critters. Have to say, I'm a tad disappointed.

 

[Rat in the Hat]

I was expecting this to be news of the sudden demise of one of our congress critters. Have to say, I'm a tad disappointed.

I opened it thinking it was her farewell thread.

 

[Truthmatters]

This goes right to the heart of the republican theories of government subsities, taxes and the magic market.


You would think this type of science would be very important to them.

The reason is the sceince yet again is not in the favor of their historically failed ideas.



That is why they are not answering the question.

They cant without having to discuss the failure of their ideas.

 

[syrenn]

I was expecting this to be news of the sudden demise of one of our congress critters. Have to say, I'm a tad disappointed.

I opened it thinking it was her farewell thread.

never thought of that!

 

[Si modo]

I was expecting this to be news of the sudden demise of one of our congress critters. Have to say, I'm a tad disappointed.

I opened it thinking it was her farewell thread.

No way! TM cracks me up.


She's schooling us. Shhhh....she's on a roll.

Again.

 

[syrenn]

I was expecting this to be news of the sudden demise of one of our congress critters. Have to say, I'm a tad disappointed.

I opened it thinking it was her farewell thread.

No way! TM cracks me up.

By the way, are you taking notes? Apparently she thinks we need to learn something from her link to wiki.

If she cant paraphrase and or come up with her own ideas and opinions about her "links" im sure not reading her links. Posting a link and then spouting her hack shit is just there for the entertainment value.

I agree she cant leave ...she is way to funny.

 

[Truthmatters]

So not one of you can comment on the threads information?


It seems you great republican economists dont know enough to discuss it.


Its why your policies always fail.

You buy the bullshit of your party masters and never really learn your facts anywhere but from your masters.

Bad info in , bad decisions out.

 

[California Girl]

I was expecting this to be news of the sudden demise of one of our congress critters. Have to say, I'm a tad disappointed.

I opened it thinking it was her farewell thread.

Hell will freeze over before TM does a farewell thread. Congress critters, on the other hand, are mortal.

 

[syrenn]

So not one of you can comment on the threads information?


It seems you great republican economists dont know enough to discuss it.


Its why your policies always fail.

You buy the bullshit of your party masters and never really learn your facts anywhere but from your masters.

Bad info in , bad decisions out.

So how much weight do you need to loose TM? Ever tried weight watchers....i hear they have a good program.

 

[Truthmatters]

If the price of a glass of beer is $3.00 and the price of a glass of wine is $3.00, a consumer might prefer to drink beer. If the government decides to levy a beer tax of $3.00 per glass, the consumer might prefer to drink wine. The excess burden of taxation is the loss of utility to the consumer for drinking wine instead of beer, since everything else remains unchanged. Most notably the tax revenue from this consumer is zero.



Come on there are nuggets in there for you.

You can try to play at least.

 

[Si modo]

I opened it thinking it was her farewell thread.

No way! TM cracks me up.

By the way, are you taking notes? Apparently she thinks we need to learn something from her link to wiki.

If she cant paraphrase and or come up with her own ideas and opinions about her "links" im sure not reading her links. Posting a link and then spouting her hack shit is just there for the entertainment value.

I agree she cant leave ...she is way to funny.

Amazing isn't it? When she had an exam question that included the phrase 'in your own words', I wonder if she whipped out a blue pen to write in a link?

 

[California Girl]

So not one of you can comment on the threads information?


It seems you great republican economists dont know enough to discuss it.


Its why your policies always fail.

You buy the bullshit of your party masters and never really learn your facts anywhere but from your masters.

Bad info in , bad decisions out.

At the risk of repeating myself.... again, I must point out the fucking obvious to the terminally stupid.... I am not now, nor have I ever been, a member of the Republican Party.

Dumbass.

 

[Truthmatters]

So a simple post on an economic term turns right into a insult fest without one shred of intelligent discussion from the right.


They are shivering from the implied death of their historically failed ideas by this simple explanation of an economic term

 

[Si modo]

So not one of you can comment on the threads information?


It seems you great republican economists dont know enough to discuss it.


Its why your policies always fail.

You buy the bullshit of your party masters and never really learn your facts anywhere but from your masters.

Bad info in , bad decisions out.

At the risk of repeating myself.... again, I must point out the fucking obvious to the terminally stupid.... I am not now, nor have I ever been, a member of the Republican Party.

Dumbass.

Gotta kick some ass, now.

And, now that I live in the Commonwealth, I don't have to pick a party to be able to register to vote.

Sa-weet.

 

[Rat in the Hat]

So not one of you can comment on the threads information?


It seems you great republican economists dont know enough to discuss it.


Its why your policies always fail.

You buy the bullshit of your party masters and never really learn your facts anywhere but from your masters.

Bad info in , bad decisions out.

You are living proof of that.

 

[CrusaderFrank]

Examples





The deadweight loss is the area of the triangle formed by the tax income box, the original supply curve, and the demand curve. This is sometimes called Harberger's triangle.
For example, consider a market for nails where the cost of each nail is 10 cents and the demand will decrease linearly from a high demand for free nails to zero demand for nails at $1.10. In a perfectly competitive market, producers would have to charge a price of 10 cents and every customer whose marginal benefit exceeds 10 cents would have a nail. However if there is one producer who has a monopoly on the product, then they will charge whatever price will yield the greatest profit. For this market, the producer would charge 60 cents and thus exclude every customer who had less than 60 cents of marginal benefit. The deadweight loss is then the economic benefit forgone by these customers due to the monopoly pricing.

Conversely, deadweight loss can also come from consumers buying a product even if it costs more than it benefits them. To describe this, let's use the same nail market, but instead it will be perfectly competitive, with the government giving a 3 cent subsidy to every nail produced. This 3 cent subsidy will push the market price of each nail down to 7 cents. Some consumers then buy nails even though the benefit to them is less than the real cost of 10 cents. This unneeded expense then creates the deadweight loss: resources are not being used efficiently.

If the price of a glass of beer is $3.00 and the price of a glass of wine is $3.00, a consumer might prefer to drink beer. If the government decides to levy a beer tax of $3.00 per glass, the consumer might prefer to drink wine. The excess burden of taxation is the loss of utility to the consumer for drinking wine instead of beer, since everything else remains unchanged. Most notably the tax revenue from this consumer is zero.


Its seems the cons here are affraid of learning things because it will cause their historically failed ideas to be outed for what they really are.

Dead weight are the Progressives who think bank ATM's are destroying the US economy