The process of eutrophication is caused by a high increase in the population of aquatic microorganisms, such as algae. This leads to a loss of oxygen because it cannot be produced anymore by these organisms since they do not have enough light energy to perform, along with carbon dioxide, the process of photosynthesis, leading to what it's known as anoxia, where other organisms that depend on oxygen to die.
Having this clear, we can say that the correct answer is the third one: C. large algae growths absorb all of the oxygen. We can see this graphically in the picture below, where in the number 4 we can see the large amount of microscopic algae that inhibits the sunlight to reach the bottom of the body of water.