Answer: C
The diol is 1-(hydroxydiphenylmethyl)cyclobutan-1-ol. The diphenylcarbinyl cation forms, and a ring CHX2 migrates from the cyclobutane carbon to it, which relieves ring strain by enlarging the four-membered ring to five. The carbonyl is left on the former cyclobutanol carbon, giving 2,2-diphenylcyclopentan-1-one.