Retort. Retorts are answers to remarks that are delivered in a sharp and witty manner, also they're often angry.
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The best summary of paragraph 2 is: "Gregor knows by the reality surrounding him that he has become a bug" (C).
Paragraph 2 is a description of the character's surroundings.
Through Gregor Samsa's eyes, the reader is given a look around the bedroom as Samsa is looking around him to try to find an anchor to reality: "It wasn't a dream;" "a proper human room." His reasoning is probably that if this metamorphosis was all a dream, his room would not look exactly like it was in real life. Yet, because the depiction of the room is so precise, with many details (like the textile samples on the table and the very specific description of the magazine cut-out), Samsa reaches the conclusion that this might be real.
