Answer:
C. Friction with the air converts potential energy to thermal energy.
Step-by-step explanation:
In the motion of the simple pendulum, in absence of air resistance, the total mechanical energy (kinetic+potential) is conserved, so the initial potential energy of the pendulum when it is released is converted into kinetic energy when the pendulum passes the lowest point, then again into potential energy as the pendulum reaches the maximum height, and so on. In this mechanism, the motion of the pendulum continues forever, since the energy is conserved.
In a real world, this does not happen: in fact, the pendulum slows down and eventually stop. The initial potential energy, however, has not been "destroyed": the law of conservation of energy states in fact that energy cannot be created or destroyed, but only transformed.
In this case, it has been transformed into thermal energy. In fact, in the real world the pendulum is moving through the air: as it passes through the air, there is friction acting on the surface of the pendulum, and because of this, part of the mechanical energy of the pendulum is "wasted" and converted into thermal energy (the temperature of the air surrounding the pendulum increases). As a result, at the end, the pendulum loses all its initial energy and it stops.