Correct Answer & Explanation
Option B
• The exclamation 'Look!' indicates an action that is happening at the very moment of speaking.
• Actions in progress at the time of speaking are expressed in the Present Continuous Tense.
• The structure for Present Continuous Tense is Subject + am/is/are + V1-ing.
• 'The children' is a plural subject, so 'are playing' is the correct form.