A market failure exists when the private sector fails to produce the socially optimal level of output (where marginal social benefit equals marginal social cost). An extreme form of market failure arises in the case of public goods, which, due to their characteristics, are not provided by the free market at all. Want to learn more about economics, or just be ready for an upcoming quiz, test or end of year exam? Jason Welker is available for tutoring, IB internal assessment and extended essay support, and other services to support economics students and teachers. Learn more here! http://econclassroom.com/?page_id=5870