SAT question, what choice could fit into this context?
I did have to look at the text a few times, so I can see how you made the mistake but I did, at last, understand the reason for their choice.
The point is that the paragraph concentrates on a particular exhibition of the work of Charles James and speaks in detail about his work so, to be consistent, C is the best choice since it mentions James and his work whereas B talks about the display of costume in general.
I think part of the trouble that we both had was that we were looking at each question separately rather than reading the whole text through first then taking the questions in context.
Having said that this question is much more a matter of opinion than 36 and 37 which are simple questions of grammar and the right choice of words.