Suppose a State Discovered Chemical Compounds in Their Water

Suppose a state discovered chemical compounds in their water. The source of these chemicals is the waste discharges of industrial plants in another state. This is an example of a(n) :

A) market failure where the market price of the output of these industrial plants exceeds the social cost of producing these goods.
B) private cost imposed by the industrial plants of another state.
C) externality where the marginal social costs of producing these industrial goods differ from the marginal private costs.
D) negative externality that could be corrected with a subsidy to the plants discharging the waste.