How does taxation lead to deadweight loss in a market, specifically affecting consumer surplus and creating market distortions?

Taxation can create a deadweight loss in a market because it changes the prices that consumers and producers face. When a tax is added to a good, the price consumers pay increases, while the price producers receive decreases. This difference means that some consumers who would have bought the product at a lower price may decide not to buy it at all, leading to a loss in consumer surplus, which is the benefit consumers get from buying a product for less than they are willing to pay. For example, if a tax raises the price of a popular snack, some people may choose not to buy it anymore, reducing sales and creating a gap between what consumers are willing to pay and what producers are willing to sell for. This gap represents the deadweight loss, as it shows the economic activity that is lost due to the tax.