Final answer:
The body compensates for lower oxygen levels at higher altitudes by increasing the production of red blood cells, stimulated by the hormone erythropoietin (EPO). This leads to increased oxygen transport capacity in the blood and is part of the acclimatization process.
Step-by-step explanation:
In high altitudes, where oxygen levels are lower, the body's oxygen saturation decreases, causing the kidneys to produce the hormone erythropoietin (EPO). EPO then stimulates the production of red blood cells to maintain adequate oxygen transport and meet the body's needs. Over time, this natural adaptation process, termed acclimatization, allows a person to partake in physical exertion without suffering from acute mountain sickness (AMS).
B) is also an accurate description of what happens when the body returns to normal altitude and oxygen level, the excess red blood cells are broken down, and the production levels return to normal. This is part of a negative feedback loop to maintain homeostasis.
Options C) and D) are incorrect. The body does not store excess oxygen at higher altitudes, nor does it ignore the need for increasing red blood cells in response to lower oxygen levels.