Explanation
Correct answer: C.
Choice C is the best answer. The convention being tested is punctuation use between sentences. In this choice, the period is used correctly to mark the boundary between one sentence ("The city…system") and another ("Analyzing…footage"). The participial phrase beginning with "analyzing" modifies the subject of the second sentence, "the AI algorithm."
Why the other choices are wrong
Choice A
Choice A is incorrect. Placing a dash before "analyzing" creates a confusing and ambiguous modifying element ("analyzing...areas") and a comma splice between "areas" and "the AI algorithm." (A comma can’t be used in this way to mark the boundary between sentences.)
Choice B
Choice B is incorrect because it results in a comma splice. A comma can’t be used in this way to mark the boundary between sentences.
Choice D
Choice D is incorrect because it results in a run-on sentence. The sentences ("The city…system" and "analyzing…footage") are fused without punctuation and/or a conjunction.