Explanation
Correct answer: C.
Choice C is the best answer. “In response” logically signals that the information in this sentence—that a new version of reCAPTCHA capable of analyzing cursor movements was released in 2014—was a direct response to the previously described issue of bots becoming capable of deciphering distorted text.
Why the other choices are wrong
Choice A
Choice A is incorrect because “for example” illogically signals that the information in this sentence exemplifies the previously described issue of bots deciphering distorted text. Instead, the release of the new version of reCAPTCHA was a direct response to that issue.
Choice B
Choice B is incorrect because “in other words” illogically signals that the information in this sentence is a paraphrase or restatement of the previously described issue of bots deciphering distorted text. Instead, the release of the new version of reCAPTCHA was a direct response to that issue.
Choice D
Choice D is incorrect because “indeed” illogically signals that the information in this sentence offers additional emphasis in support of the previously described issue of bots deciphering distorted text. Instead, the release of the new version of reCAPTCHA was a direct response to that issue.