The previous answer choice sounded odd to me and I couldn't put my finger on it. Following is a link to a thorough explanation for why the choice would be "on", basically that one lives on the edge of town, not in the edge of town.
http://english.stackexchange.com/questions/39532/in-the-outskirts-versus-on-the-outskirts


Heather B.
tutor
Indeed, one would live in the suburbs as they are considered a part of a town. However, one would live on the edge, fringe or the outskirts of town.
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02/26/16

Heather B.
tutor
For example:
Aloha is a suburb of Portland and there is an Intel campus in the suburbs.
If the campus was on the edge of Aloha, one would say that it is on the outskirts of town.
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02/26/16
Kenneth S.
02/26/16