Explanation/Reference:
Application state is a data repository available to all classes in an ASP.NET application. Application state is stored in memory on the server and is faster than storing and retrieving information in a database. Unlike session state, which is specific to a single user session, application state applies to all users and sessions.
Therefore, application state is a useful place to store small amounts of often-used data that does not change from one user to another.
Incorrect:
not A: Session State contains information that is pertaining to a specific session (by a particular client/ browser/machine) with the server. It's a way to track what the user is doing on the site.. across multiple pages...amid the statelessness of the Web. e.g. the contents of a particular user's shopping cart is session data. Cookies can be used for session state.
Not B: Viewstate is a state management technique in asp.net. ASP.NET Viewstate is preserving the data between the requests or postbacks and stored in hidden fields on the page.