Sentence Analysis:
The given sentence is: "Every pupil understands dictionary."

Subject-Verb Agreement:
In this sentence, the subject is "every pupil" and the verb is "understands." The verb "understands" is in agreement with the subject "every pupil" because the subject is singular and the verb is in the present simple tense for third-person singular subjects.

Explanation:
The correct sentence is option 'C' because it follows the subject-verb agreement rule. The subject "every pupil" is singular, and the verb "understands" is also singular. In English grammar, when the subject is singular, the verb should be in the singular form as well.

In option 'A', the subject "the children" is plural, but the verb "goes" is in the singular form. This is incorrect because the verb should be in the plural form "go" to agree with the subject.

In option 'B', the subject "many shops" is plural, but the verb "closes" is in the singular form. This is incorrect because the verb should be in the plural form "close" to agree with the subject.

In option 'D', the subject "most children" is plural, but the verb "runs" is in the singular form. This is incorrect because the verb should be in the plural form "run" to agree with the subject.

Subject-Verb Agreement Rule:
In English grammar, the subject-verb agreement rule states that the verb should agree with the subject in terms of number (singular or plural). If the subject is singular, the verb should also be singular, and if the subject is plural, the verb should also be plural.

Conclusion:
The correct sentence is option 'C' because it follows the subject-verb agreement rule. The subject "every pupil" is singular, and the verb "understands" is also singular. The incorrect sentences in options 'A', 'B', and 'D' do not follow the subject-verb agreement rule as the verbs do not agree with their respective subjects in terms of number.