Step 1: Concept
The fringe width ($\beta$) in Young's double slit experiment is given by $\beta = \frac{\lambda D}{d}$.
Step 2: Meaning
$\lambda = 500 \text{ nm} = 500 \times 10^{-9} \text{ m}$, $D = 2 \text{ m}$, and $d = 2 \text{ mm} = 2 \times 10^{-3} \text{ m}$.
Step 3: Analysis
$\beta = \frac{500 \times 10^{-9} \times 2}{2 \times 10^{-3}} = 500 \times 10^{-6} \text{ m} = 0.5 \times 10^{-3} \text{ m} = 0.5 \text{ mm}$.
Step 4: Conclusion
Hence, the fringe width is 0.5 mm.
Final Answer: (C)