What does deadweight loss represent in a market graph?

Deadweight loss represents the lost economic efficiency that occurs when the market is not in equilibrium, meaning that the supply and demand for a good or service are not balanced. This can happen due to factors like taxes, subsidies, or price controls, which prevent the market from reaching the optimal quantity of goods produced and consumed. In a market graph, deadweight loss is often shown as a triangle that forms between the supply and demand curves, illustrating the quantity of goods that are not being traded because of market distortions. For example, if a government imposes a tax on a product, the quantity sold decreases, leading to fewer transactions than what would occur without the tax, resulting in a deadweight loss. This means that both consumers and producers miss out on potential benefits that could have been gained if the market operated freely.