Final answer:
During the Gupta Empire, guilds like merchant groups maintained professional standards and had a role in local governance, including sending representatives to local councils.
Step-by-step explanation:
The Gupta Empire had a thriving economy with numerous skilled groups such as bankers, physicians, and merchants. Each of these groups formed a guild to maintain professional standards within their trades. Guilds functioned as a collective of professionals that could influence local economics and policymaking.
Regarding the provided examples, the one that best shows how guilds functioned during the Gupta Empire is: C. A merchant group sent representatives to a local council. This is because guilds frequently managed their own affairs and could exert influence by participating in local governance, mirroring the kinds of activities merchant guilds would have undertaken during the Gupta period.