Answer:
c is the correct answer
Step-by-step explanation:
Conflict is a literary element that the writer use to create challenges in the story to create the suspense if the goal would be achieved or not.
So, according to the definition, the conflict developed in the passage is in line 3. In this sentence we find conflict developing as the people of Phippsburg want to get rid of the people on Malaga Island, because they think that they are wasting town's expense on them.
I hope this helps. I am sorry if you get it wrong.