Should be B) - if the pressure is supplied by the water tower, the same height will correspond to the same pressure. At 40 m the pressure of the water will be the same as the top of the tower, 1 atm, so the water will not flow anymore.
MedPR - you can't do much with Bernoulli here, at least in the way that you're using it. You cannot plug arbitrary numbers in it - there has to be some flow to use, so v should not be 0, the pressure at the top is 1 atm, not 0, and the whole left side equals a constant, which you don't know.
catzzz88, yes, I'd say you are overthinking it. 😉 Although if the building is 40 m, the faucets will be slightly below and everything will still work, while for 50 m building, faucets at 49 m won't work. So the answer stays the same even when overthought.