What effect does a tax on a good have on market efficiency, specifically in terms of deadweight loss?

When a government places a tax on a good, it increases the price that consumers pay and decreases the price that producers receive. This change can lead to fewer transactions in the market because some buyers may decide not to purchase the good at the higher price, while some sellers may choose not to sell it at the lower price. As a result, the market becomes less efficient because not all mutually beneficial trades happen; this creates what we call deadweight loss. For example, if a tax is imposed on soda, some people might stop buying it because it is too expensive, leading to lost sales that would have benefited both the seller and the buyer. Overall, the tax reduces the overall economic welfare because it causes these missed opportunities for trade.