While the market mechanism generally leads to an efficient allocation of resources, markets sometimes fail to achieve that. Economists call it a market failure when the market itself falls short of allocating resources efficiently. The correct answer is C. External cost means negative externality. The best known example of an external cost (or negative externality) is pollution generated as a byproduct during a production process. Zero-sum game can be described as a basketball match where one party wins and the other loses. Market power is the ability of a single actor (or a few actors) to control or substantially influence market prices.  All the decisions made by economic actors and their interactions in the markets, as well as the linkages between these markets, produce economy wide outcomes.