Mark writes the following expression:

First, the problem deals with multiplication of terms with the same base and different exponents. In this case, we keep the base and add the exponents.
In this question:
Multiplying the numbers: -4*2*5 = -40
Terms with x:

Terms with y:

So the correct answer is:

Marc's error happened in the addition of the exponents of x, as 3 - 8 = -5, not 5 like Marc founds.