Home▸Economics & Social Systems▸Public Economics: Externalities & Pigouvian Tax

📉 Public Economics: Externalities & Pigouvian Tax

Interactive supply-and-demand simulator showing how a negative externality creates deadweight loss, and how a tunable Pigouvian tax shifts the private-cost curve to restore the socially optimal quantity.

Economics & Social Systems2DModerate60 FPS

Details

CategoryEconomics & Social Systems

RenderingCanvas 2D

DifficultyModerate

Target FPS60

ControlsExternal cost / unit slider (0-40, sets the constant marginal externality that separates private from social marginal cost); Pigouvian tax / unit slider (0-40, shifts the effective private supply curve upward); 'Set tax = optimal' button snaps the tax to the current externality value; Reset restores defaults. Live stat boxes report the no-intervention market quantity/price, the socially optimal quantity/price, the traded quantity and tax revenue under the current tax, and the resulting deadweight loss with the percentage eliminated.

public economicsexternalitiesPigouvian taxdeadweight losssupply and demandmarket failure

📖 Read the articleThe maths behind Public Economics: Externalities & Pigouvian Tax

Related simulations

Import Tariff Deadweight Loss SimulatorInteractive supply-and-demand model of an import tariff: raise the tariff-rate slider and…

Supply & Demand Market SimulatorBuyer and seller agents meet in an open market — watch price and quantity converge toward…

Economics Public Economics SimulationThis simulation demonstrates public economics principles, allowing users to explore concepts… ⊞ All 199 in Economics & Social Systems →

⚙ Under the hood

Supply-and-demand simulator for a good with a negative externality: private marginal cost sits below social marginal cost, so the unregulated market overproduces and a deadweight-loss triangle opens up. Drag the externality slider to set the external cost per unit, then drag the Pigouvian tax slider to shift the effective supply curve toward social marginal cost and watch the deadweight loss shrink toward zero at the optimal tax.

public economicsexternalitiesPigouvian taxdeadweight losssupply and demandmarket failure

2D · HTML5 Canvas 2D · 60 FPS target · runs fully client-side, no install