The answer is (d): the water level will be about where it was before the experiment, as seen in the photograph at the right, which was taken after the candle went out.
When the candle is lit, the air in the tube is heated, causing it to expand and push the water level in the tube down a bit. The candle burns for 20 or 30 seconds, during which time the water level stays about constant. After the candle flame is extinguished the water level rises to about where it was before the experiment started. Equilibrium is obtained within a few seconds after the flame goes out.
This experiment is often performed improperly, leading to the claimed result that it shows that the air is composed of about 20% oxygen. Ostensibly the candle burns up the oxygen and leaves about 20% less "air" in the tube. I once witnessed this experiment performed incorrectly for a group of students at a science fair and a group of teachers at a teacher workshop in a single week.
Common errors are (1) to put a bottle on top of the candle after it is lit, trapping hot air, so when the air in the bottle cools it pulls the water level up, or (2) to allow some of the hot air in the bottle to escape during the heating process.
During the combustion process oxygen is used up, but an equal or greater amount of other gas is produced, that according to the gas laws should occupy an equal volume. In addition, other chemical and physical processes occur. Click here for a more complete summary of the chemical reactions and effects occurring while flame is burning and immediately afterward.
