Explanation:
In an inverter circuit, there are two transistors that are used to control the output voltage. These transistors can be either MOSFETs or BJTs (Bipolar Junction Transistors). The region in which the transistors operate determines the gain of the inverter.

Saturation Region:
When the transistors are in the saturation region, they are fully on and conducting maximum current. In this region, both MOSFETs and BJTs have a high gain, resulting in a large output voltage swing. The saturation region is characterized by the voltage between the collector and emitter (VCE) being less than the base-emitter voltage (VBE) for BJTs or the drain-source voltage (VDS) being less than the threshold voltage (Vth) for MOSFETs.

Linear Region:
When the transistors are in the linear region, they are partially on and conducting a variable amount of current. In this region, the gain of the transistors is reduced, resulting in a smaller output voltage swing. The linear region is characterized by the voltage between the collector and emitter (VCE) being greater than the base-emitter voltage (VBE) for BJTs or the drain-source voltage (VDS) being greater than the threshold voltage (Vth) for MOSFETs.

Cut-Off Region:
When the transistors are in the cut-off region, they are fully off and not conducting any current. In this region, the gain of the transistors is zero, resulting in no output voltage. The cut-off region is characterized by the voltage between the collector and emitter (VCE) being greater than the base-emitter voltage (VBE) for BJTs or the drain-source voltage (VDS) being greater than the threshold voltage (Vth) for MOSFETs.

Conclusion:
In the region where the inverter exhibits gain, the transistors are in the saturation region. This is because the saturation region provides the highest gain and allows for a large output voltage swing. Therefore, option D - saturation is the correct answer.