Negative selection is what leads you to answer D, i.e. realizing that A, B, and C are wrong, while D makes sense and is possible.
Answer A: "live in permanent villages" is wrong, because the reading passage says that they lived in "relatively permanent villages". A quantifying adverb such as 'relatively' is what you've got to watch out for to identify wrong answers.
Answer B: The reading passage does not say that social factors may have led to domestication. Conversely, it says that feasting and 'potlatch' are social factors and not environmental or technical factors; that's all.
Answers C & D: Competition among neighboring groups DID NOT make foraging more preferable than domestication. On the contrary, the reading passage says: "Competition among neighboring groups led to ever-more elaborate forms of competitive exchange, with increasingly large amounts of food and other goods being given away at each subsequent potlatch." And this is exactly why answer D is correct ("Increasingly large amounts of food were easily available for competitive exchange.").