Harberger Triangles

Prior to Arnold Harberger, economists rarely estimated deadweight losses due to government policy. Harberger triangles (a.k.a. deadweight loss triangles) are used to calculate the efficiency costs of taxes, government regulations, monopolistic practices, and various other market distortions. These estimates (found through the area of a Harberger triangle) led to an important reevaluation of the welfare effects of multiple misrepresentations in an economy and exposed the extent of market failure.

In a simple example:

The area of the gray shaded triangle represents the deadweight loss of an excise tax.