The answer C correctly uses possessive form and is the right answer. It's not A because there is only one George so the apostrophe is in the wrong place. In B, there's not even an apostrophe and it's not clear as to whether there is only one cousin or two or more cousins. In answer D, here should not be an apostrophe for develops.
Setting. The Morning Room at the Manor house is a room that would have held part of the action of the play. Therefore, it is setting.
