When resources are misallocated, or allocated inefficiently,

A) market failure occurs.
B) then there must be external costs or benefits in production.
C) then it must be the case that there is imperfect information in the market.
D) then it must be the case that the good is a public good.

Misallocated

A situation where resources are used inefficiently, resulting in lost potential output or wasteful expenditures.

Market Failure

A situation in which the allocation of goods and services by a free market is not efficient, often leading to a social welfare loss.

Public Good

An offering of goods or services to society's members at no cost, made available by public institutions or private bodies or individuals, not aiming to generate profits.