Which of the following best describes what occurs during a deadweight loss?

During a deadweight loss, there is a reduction in economic efficiency that occurs when the equilibrium outcome is not achieved or is not achievable. This situation typically arises due to factors such as taxes, subsidies, price ceilings or floors, or monopolistic pricing that prevent the market from reaching its optimal production and consumption levels.

When a deadweight loss occurs, it causes some consumers to pay higher prices or to consume less, while some producers are unable to sell as much of their goods as they would in a more efficient market. Therefore, both consumers and producers lose surplus, which indicates that they are worse off than they would be if the market functioned without interference. This situation contrasts with scenarios where surplus is maximized, market equilibrium is achieved, or all transactions are fulfilled, which would not result in any deadweight loss.