If a Negative Externality Exists in the Production of Paper

If a negative externality exists in the production of paper and paper is sold in a perfectly competitive market, at the equilibrium output:

A) additional net gains to society are possible by reducing the output of paper.
B) additional net gains to society are possible by increasing the output of paper.
C) the marginal social benefit of paper equals its marginal social cost.
D) additional net gains to society are not possible from either increasing or decreasing the output of paper.