Market failure: A situation in which the free market fails to allocate resources efficiently.
How to apply it: Identify the main sources of market failure: externalities, public goods, common resources, and market power.
Course: AP Microeconomics · Unit: Market Failure and the Role of Government
Practice questions about Market failure on AimFive — get rubric-based feedback showing exactly which points you earned.
AP and Advanced Placement are trademarks of College Board. AimFive is not affiliated with or endorsed by College Board.