You need to design a highly available Azure SQL database that meets the following requirements: - Failover between replicas of the database must occur without a...

Azure SQL Database Serverless meets the requirements and is less expensive than Azure SQL Database Business Critical.
Note: General Purpose service tier zone redundant availability.
Zone-redundant configuration for the general purpose service tier is offered for both serverless and provisioned compute.
This configuration utilizes Azure Availability Zones "‰to replicate databases across multiple physical locations within an Azure region."‰By selecting zone-redundancy, you can make your"‰new and existing serverless and provisioned general"‰purpose single databases and elastic pools resilient to a much larger set of failures, including catastrophic datacenter outages, without any changes of the application logic.
Incorrect:
Not A, not B: Zone-redundant configuration is not available in SQL Managed Instance.
Not C: Azure SQL Database Business Critical is more expensive than Azure SQL Database Serverless.
Note: Premium and Business Critical service tiers use the Premium availability model, which integrates compute resources (sqlservr.exe process) and storage
(locally attached SSD) on a single node. High availability is achieved by replicating both compute and storage to additional nodes creating a three to four-node cluster.
Reference:
https://docs.microsoft.com/en-us/azure/azure-sql/database/high-availability-sla