Which of the following statements accurately describe the effects of taxes and subsidies on market efficiency? Select all that apply.

Taxes and subsidies can significantly impact market efficiency, which refers to how well resources are allocated in an economy. When a tax is imposed on a good, it increases the price for consumers and reduces the price received by producers, which can lead to fewer transactions than what would happen in a free market. This can create a "deadweight loss," meaning that some potential trades that could benefit both buyers and sellers do not happen, resulting in less overall economic activity. On the other hand, subsidies can encourage more production and consumption by lowering costs, but they can also lead to overproduction of goods that may not be in high demand. For example, if the government gives a subsidy for electric cars, more people might buy them, but if too many are produced and sold, it could lead to wasted resources if the demand isn’t as high as expected.