Scrum team together negotiates and reaches an agreement. They may use the team velocity as a standard to calculate how much work they can take.
Development team is involve in product production, development team is not the one to finalize the number of product backlog items that can be selected for sprint backlog.
Development Team, since they are the owners of the work.
Product Owner optimizes the teams work by keeping the product backlog ordered, and hence deciding what they work on next. Only the Development Team can finalize how many product backlog items it can complete in the Sprint. Correct answer is C.