The correct answer is C) Mexico refused to discuss the matter.
The other options of the question were A) The US paid $30 million for the territory. B) Mexico and the US could not agree on a fair price.
What happened when Polk sent a diplomat to try to buy New Mexico and California was that Mexico refused to discuss the matter.
US President James K. Polk had sent John Slidell -a diplomat- to México in order to negotiate the purchase of New Mexico and California. But negotiations failed and the government of México refused to discuss the matter. That is when General Zachary Taylor received the order to move his troops to Rio Grande, Texas.