Final answer:
Efficiency loss, or deadweight loss, occurs when the combined consumer surplus and producer surplus in a market are not maximized, often due to price controls that prevent the market from reaching optimal equilibrium.
Step-by-step explanation:
Efficiency loss occurs when the sum of consumer surplus and producer surplus is less than the maximum. This situation is often referred to as a deadweight loss, which represents the lost economic opportunity where some beneficial transactions are not realized. In other words, deadweight loss occurs when the total surplus of society is reduced because the economy is not operating at an efficient quantity. An example of this inefficiency is when price controls prevent suppliers and demanders from engaging in mutually beneficial transactions, thus impeding the market from reaching an equilibrium where consumer and producer surplus are maximized.