The following diagram illustrates a market that had been in equilibrium at (PE, QE) prior to the imposition of a price ceiling, PC. The deadweight loss that arises because of this market interventionis best described bv the area defined by:
Prior to the price ceiling, the total surplus was d + e + f + g + h, consisting of consumer surplus of f + e and producer surplus of d + g + h. The price ceiling causes the quantity supplied to decrease to Qc and for those consumers who can find supply to gain consumer surplus of g at the expense of producers. With the decline in supply, consumers lose consumer surplus e and producers lose producer surplus d for a combined deadweight loss of d+e.