Which of the following statements accurately describe the relationship between taxation, deadweight loss, and negative externalities in the context of market efficiency? Select all that apply.

Taxation can create something called deadweight loss, which is a loss of economic efficiency that happens when the balance between supply and demand is disturbed. When a tax is imposed, it raises the price for consumers and lowers the price received by producers, leading to fewer transactions than would occur without the tax. This situation becomes even more complicated when negative externalities, like pollution, are involved. For example, if a factory pollutes the air, it can harm people nearby, but the factory does not pay for this harm. Taxing the factory for its pollution can help reduce the negative impact and encourage more efficient market behavior, but it may also lead to deadweight loss if not done carefully.