Positive externality: A positive externality occurs when the production or consumption of a good results in benefits for third parties who are not directly involved in the transaction.
Consumer surplus: Consumer surplus represents the difference between what consumers are willing to pay for a product and what they actually pay. It reflects their benefit or gain from purchasing the product at a lower price.
Producer surplus: Producer surplus represents the difference between what producers are willing to sell a product for and what they actually receive. It reflects their benefit or gain from selling the product at a higher price.