The picture is a schlieren-style sketch of the wave pattern just past a supersonic nozzle exit. The direction the jet boundary first bends in, right at the lip, tells you the exit condition. Check each option against that.
Overexpanded: here the exit pressure is lower than the ambient (back) pressure, so the surrounding air pushes the jet boundary inward as soon as it leaves the nozzle. This inward push is carried by oblique shock waves running from the lip toward the centerline, exactly the converging, crossing wave pattern drawn in the figure, which then keeps repeating (reflecting) further downstream as a shock diamond pattern.
Underexpanded: here the exit pressure is higher than ambient, so the jet boundary bulges outward at the lip through expansion (Prandtl-Meyer) waves, not inward. That is the opposite shape from what the figure shows.
Ideally expanded: here exit pressure equals ambient pressure exactly, so no waves form at the exit at all, the jet leaves as a straight, parallel stream. The figure clearly shows a wave pattern, so this cannot be the case.
Subsonic: shock waves and Mach wave diamond patterns are only possible in supersonic flow, a subsonic exit cannot generate this crossing wave pattern.
Only the overexpanded case produces the inward-bending, crossing shock pattern shown right at the nozzle lip.
Let's summarize:
Jet boundary bending inward at the exit, with crossing oblique shocks, means overexpanded flow ($p_e<p_a$).
Jet boundary bulging outward means underexpanded flow ($p_e>p_a$); no waves at all means ideally expanded flow ($p_e=p_a$).
So the flow at the nozzle exit is overexpanded, option (A).
