2:00 positive externalities
5:08 negative externalities
9:00 written explanations + graphs
This video examines total surplus accrued in the market by subtracting total costs from total benefits. Then deadweight loss (DWL) is the difference between the maximum possible total surplus and the total surplus actually achieved at any given quantity.
The quantity produced is determined by costs and benefits which accrue to market participants. If there are either external benefits (positive externalities), or external costs (negative externalities), the free market outcome will be different from the efficient outcome, and total surplus will not be maximized (i.e. there will be deadweight loss).
Thank you to ETS Multimedia Services at UC San Diego and the developers of open-source programs OpenShot Video Editor (openshot.org) and Audacity (audacityteam.org)