The best and most correct answer among the choices provided by your question is the second choice.
The <span>sentence demonstrates </span>improper<span> use of an apostrophe is "</span><span>Most sheepÍs wool is used to produce cotton."</span><span> The error is the word "sheep's". Since it is preceded by most, then we can imply that it is plural, therefore, we take its plural possessive form, "sheeps'", with an apostrophe after s. </span>
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