GMAT Sentence Correction (SC) | Re: While all states face similar industrial waste problems, the

any expert can help me solve the SVA problem

IMO, I can understand that compound subject need a plural verb,
eg: Lin and Guy drive to work, (MANHATTAN P 43),
but this case,
although compound subject is connect by "and", I view "the predominant industries and the regulatory environment " as a singular subject, because it is a group , "of each state" is modifier, it means each state has the group issue, so the subject is singular noun, that's why I pick up D rather
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