The Diagram Below Shows the Private and Social Marginal Costs

The diagram below shows the private and social marginal costs (MCP and MCS) and the social marginal benefits (MBS) of producing disposable diapers.
FIGURE 17- 2
-Refer to Figure 17- 2.The allocatively efficient level of production and use of disposable diapers is

A) Q1,because that is where MCS equals MBS.
B) Q2,because that is where the externality is internalized.
C) Q0,because that is where MCS exceeds MCP.
D) Q0,because that is where MCS equals MBS.
E) Q1,because that is where MCP equals MBS.