An externality is a cost or benefit of a product that falls on third parties - not the buyer and not the seller. Externalities are considered market failures because the optional social benefits and costs are different from the optimal private benefits and costs. Consider a paper company that pollutes. Which of the following is not true?

A. Both the company and its customers benefit form the pollution.

B. People not associated with the company, its products, or its customers are hurt by the pollution.

C. Government can correct the externality by fining, taxing, or regulating.

D. The company underproduces its products.