Final answer:
Dramatic irony occurs when the reader or audience knows more about the situation than the characters, leading to tension or humor based on the reader's insight.
Step-by-step explanation:
When Mrs. Crater agrees with Mr. Shiftlet in the context of dramatic irony, the reader knows more about the situation than the characters. This is because dramatic irony is a literary device where the audience's awareness surpasses that of the characters within the narrative, creating a situation where the audience foresees the oncoming consequences while the characters remain unaware. This can lead to tension, humor, or emotional responses such as sympathy due to the insight the audience holds over the characters' understanding of their circumstances.