What is a market failure? It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit A equals marginal social cost. It refers to the inability of the market to allocate resources efficiently up to the point where marginal social benefit B equals marginal private cost. C It refers to a situation where an entire sector of the economy (for example, the airline industry) collapses because of some unforeseen event. D It refers to a breakdown in a market economy because of widespread corruption in government