The Following Graph Shows Equilibrium in a Market in the Presence

Multiple Choice

The following graph shows equilibrium in a market in the presence of an externality. If technology is fixed, the discrepancy between the market output and the efficient level of output is eliminated by______.​ ​
Figure 17.2

A) subsidizing production of the good by $10 per unit
B) taxing the firm producing the good $10 per unit​
C) using a quota system to restrict production to 160 units.
D) subsidizing production of the good by $5 per unit​
E) letting the private market operate freely​