**Explanation:**

The correct answer is option **C) he looked like a fool**. The people were laughing at the narrator because they perceived him to be foolish based on his actions, appearance, or behavior. Here is a detailed explanation of why this option is the correct answer:

**1. Context:**
The question does not provide any specific context or story, so we can assume that the narrator's actions, appearance, or behavior led to people laughing at him.

**2. Perception of Foolishness:**
The people may have perceived the narrator to be foolish based on various reasons such as:

- **Mistakes or blunders:** The narrator could have made mistakes or blunders that made him appear foolish. This could include saying or doing something silly or clumsy that provoked laughter from others.
- **Unusual behavior:** The narrator's behavior might have been unconventional or strange, leading people to find it amusing or ridiculous.
- **Ignorance or lack of knowledge:** If the narrator displayed a lack of knowledge or understanding in a particular situation, people might have laughed at him for not knowing something that they considered common knowledge.
- **Inappropriate dress:** The narrator's choice of clothing could have been inappropriate for the occasion or simply unusual, making him the subject of ridicule.

**3. Laughter as a Reaction:**
Laughter is a natural human response to situations that are perceived as funny, ridiculous, or foolish. When people find something amusing or when they observe someone behaving or looking foolish, they often laugh.

**4. Impact of Laughter:**
The narrator being laughed at can have various effects on him, such as:

- **Embarrassment:** The narrator may feel embarrassed or humiliated due to the laughter directed at him.
- **Isolation:** The laughter may make the narrator feel isolated or excluded from the group, as laughter can create a divide between the person being laughed at and those laughing.
- **Self-consciousness:** The narrator may become self-conscious about his actions, appearance, or behavior, leading to a loss of confidence or self-esteem.

In conclusion, the people were laughing at the narrator because they perceived him to be foolish based on his actions, appearance, or behavior. The laughter may have caused embarrassment, isolation, and self-consciousness for the narrator.