Answer:

Living on a particular street or avenue is a common expression used to indicate the location of someone's residence. In this case, the correct answer is option 'C', They live on Atlantic Avenue.

Explanation:
To understand why "on" is the correct preposition to use in this context, let's take a closer look at the different prepositions and their meanings:

a) At: The preposition "at" is used to indicate a specific point or location. It is commonly used when referring to a particular building or place, such as "at the mall" or "at the park." However, when it comes to indicating a residential address, "at" is not typically used.

b) In: The preposition "in" is used to indicate being inside or within the boundaries of a certain area or place. It is commonly used when referring to a city, country, or region, such as "in New York" or "in the United States." However, when it comes to specifying a specific street or avenue, "in" is not the most appropriate preposition to use.

c) On: The preposition "on" is used to indicate being physically located or situated on a surface or object. It is commonly used when referring to streets, avenues, roads, and other similar locations. When we say "They live on Atlantic Avenue," we are indicating that their residence is situated directly on Atlantic Avenue.

d) To: The preposition "to" is used to indicate movement or direction towards a particular place. It is commonly used when referring to going somewhere, such as "going to the store" or "traveling to a different city." However, when it comes to describing someone's residential address, "to" is not the most suitable preposition to use.

Therefore, the correct preposition to use in this context is "on," as it accurately conveys the idea that the individuals mentioned in the statement live directly on Atlantic Avenue.