In the AP® Microeconomics course, market failure refers to how a market economy (free markets) can often fail to achieve the correct outcomes for individuals and society. Market failure is essentially about allocative inefficiency and the overallocation or underallocation of resources to producing a good or service. The main forms of market failure are: positive and negative externalities of production and consumption, public goods and the free-rider problem, common access resources, asymmetric information and monopoly power. Here we also examine how the various types of government interventions can help free markets overcome their failings.