Answer: A form of irony that is understood by the audience but not by the characters in a play is a (C.) dramatic irony.
Step-by-step explanation: Dramatic irony is a literary device and a type of irony which is understood by the ones who are reading or watching a play but it is not grasped by the characters which are part of that play. In that way, when a writer resorts to dramatic irony, what he/she intends to do is allowing the audience to know something that the characters do not know. At the same time, this makes the audience view the actions and words of the characters in a different way than the characters do. Dramatic irony has been used by Shakespeare in some of his plays such as Macbeth and Romeo and Juliet.