“Deadweight loss” is a term from economics that describes an overall economic or societal loss due to market inefficiencies. Imagine a situation where what buyers are willing to pay for a ...

If the price is below what people would pay, and the product is sold out, you have a deadweight loss. The Corporate Finance Institute defines this as the loss of economic efficiency when the ...

The amount of the deadweight loss varies with the shape of the supply and demand curves, and not all taxes have the same impact. Nevertheless, at least under basic free-market economics ...

Julia Kagan is a financial/consumer journalist and former senior editor, personal finance, of Investopedia. Lea Uradu, J.D., is a Maryland state registered tax preparer, state-certified notary ...

They must also make changes in their spending habits to avoid taxes, further placing a burden on them and lessening their overall economic quality of life. While taxes create deadweight loss ...

And I particularly like a video they produced which uses supply and demand curves to show how taxes reduce economic output. But before we watch that video on taxes and “deadweight loss,” here ...