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The deadweight loss is the net loss to the combined system (producers, consumers, and oracle leech). So if the total surplus of the system was X, and the deadwe
by 34624523 8y ago
The deadweight loss is the net loss to the combined system (producers, consumers, and oracle leech). So if the total surplus of the system was X, and the deadweight loss was (F×Q_e - F×Q_f)/2, the total surplus of the system with oracle is (X - ((F×Q_e - F×Q_f)/2)). This is less than X.
The producers/consumers combined would lose both the oracle tax and the deadweight loss (lack of opportunities that otherwise would have occured).