Externalities Between Two Firms Can Be "Internalized" If: Which Statement(s)correctly

Multiple Choice

Externalities between two firms can be "internalized" if: Which statement(s) correctly complete(s) the sentence?
I.The two firms merge.
II.Bargaining costs are zero.
III.The externalities affect each firm equally.
IV.Marginal costs for both firms are constant.

A) Only II.
B) All except III.
C) I and II,but not III and IV.
D) I and IV,but not II and III