Step 1: Identify the type of reaction.
The reactant contains a lactone ring with a carboxylic acid group and is subjected to acidic hydrolysis (H$^+$/H$_2$O). Under these conditions, intramolecular ester linkages can open and re-lactonize into more stable cyclic esters.
Step 2: Determine stability of possible products.
Acidic hydrolysis opens the lactone, forming a hydroxy–acid intermediate. This intermediate then undergoes intramolecular esterification. The most stable cyclic ester formed is the five-membered lactone because it has minimal ring strain.
Step 3: Evaluate options.
Option (C) represents a five-membered lactone, which is the favoured product after ring opening and re-closure. Options (A), (B), and (D) represent less stable or incorrect structural possibilities.
Step 4: Conclusion.
Thus, the major product is the five-membered lactone shown in option (C).