A market failure occurs when

The correct answer is D. The individual's pursuit of self-interest makes the society worse off.

A market failure creates irrational outcomes for groups when what seems to be an appropriate decision for an individual is the incorrect one for the broader group. In other words, what is presumed to be rational for one person my result in irrational outcomes for others. The resulting challenge has more to do with access to products as the quantity supplied does not equal quantity demanded. In essence, those who acted based on self-interest monopolizes consumption leaving lesser benefits for others.

Answers a, b, and c are incorrect. The issues resulting from a market failure are more focused on access to good than the ability to buy products and services which is implied in the incorrect answers.