I believe it is B as well I feel that it is the most logical
In order to interpret a story, it is essential to consider all levels of it. The literal meaning refers to the plot, setting, and characters. It is the first level that you see in the story. In order to be interpreted, it needs to be considered together with the other levels. As for the supernatural level, it usually requires some analysis so as to be identified. The analysis has to be considering mainly the supernatural elements and events happening in the story, such as ghosts, some strange events, like the sudden appearance of objects. While the other two levels can be found in the story itself, the psychological level is analyzed usually by the reader, or writer. It is the interpretation of the story itself. To consider the psychological level, the other two have to previously analyzed, because this level takes them into account.
C) a relatively small, localized arena for trade and commerce
