Final answer:
The Leidenfrost effect occurs when droplets are levitated by their own vapor layers on a very hot surface, which is statement 'C'. Statements 'A' and 'B' are incorrect descriptions of the phenomenon.
Step-by-step explanation:
The correct statement regarding the Leidenfrost effect is 'C. Leidenfrost effect is characterized by droplets levitated by their own vapor layers on a sufficiently hot surface.' This phenomenon occurs when a liquid comes into contact with a mass significantly hotter than the liquid's boiling point, creating an insulating layer of vapor that prevents the liquid from boiling rapidly. Conversely, 'A' describes nucleate boiling, which is a different heat transfer process, and 'B' is incorrect because the Leidenfrost effect can indeed be observed with water when the surface temperature is high enough.