what is deadweight loss 
a deadweight loss is a cost to society created by market inefficiency which occurs when supply and demand are out of equilibrium mainly used in economics deadweight loss can be applied to any deficiency caused by an inefficient allocation of resources price ceilings such as price controls and rent controls price floors such as minimum wage and living wage laws and taxation can all potentially create deadweight losses with a reduced level of trade the allocation of resources in a society may also become inefficient investopedia eliana rodgersunderstanding deadweight lossa deadweight loss occurs when supply and demand are not in equilibrium which leads to market inefficiency market inefficiency occurs when goods within the market are either overvalued or undervalued while certain members of society may benefit from the imbalance others will be negatively impacted by a shift from equilibrium the market can regain stable footing when demand and supply fall into better alignment through interventions or consumer actions 