The correct answer is: A. were
The verb “to be” has three forms: am, is, and are. The form that is used depends on the subject of the sentence. In this sentence, the subject is “people.” “People” is a plural noun, so the verb that is used must be the plural form, “were.”
The other options are incorrect because they are not the plural form of the verb “to be.” B. was is the singular form of the verb, which would be used if the subject of the sentence was a singular noun, such as “person” or “child.” C. am is the first person singular form of the verb, which would be used if the subject of the sentence was “I.” D. is is the third person singular form of the verb, which would be used if the subject of the sentence was a singular noun that does not refer to a person, such as “dog” or “house.”