# How to determine which triangle is DWL?

On a graph where there is a shift in either the demand or supply curve, there is often a deadweight loss, but which triangle is correct? For instance in this image the DWL is the green triangle, but what about the white triangle beneath it? They have the same area, so are both of them equally valid? If not, how can I determine which triangle is DWL? Thanks!

• Note the area of the white triangle is the same as the area of the green triangle, due to the fact that the two demand functions are linear and parallel. – hipHopMetropolisHastings Mar 5 '18 at 4:06

## 1 Answer

Here's a quick and dirty trick:

DWL is the triangle that points (horizontally) towards the efficient quantity.

If equilibrium quantity is lower than the efficient quantity, DWL should point rightward, and it represents the amount of unrealized gains from trade.

If equilibrium quantity is higher than the efficient quantity, DWL should point leftward, and it represents the amount of social loss due to over-production/consumption (when social marginal cost is greater than social marginal benefit).