In a monopoly market, what typically occurs due to the lack of competition, resulting in a loss of economic efficiency known as deadweight loss?

In a monopoly market, one company controls the entire supply of a product or service, which means there is no competition. Because the monopolist is the only seller, they can set prices higher than in a competitive market, leading to less overall sales. This situation creates a loss of economic efficiency known as deadweight loss, where potential transactions that could benefit both the buyer and seller do not happen. For example, if a company sells a video game for $60, some people who would buy it for $40 are unable to purchase it, resulting in lost sales that would have added value to both the consumer and the producer. Thus, the lack of competition not only raises prices but also prevents the market from maximizing overall welfare.