The narrator asks do I dare eat __ A. Peach B. A biscuit C. An oyster D. Tea cakes

i think the answer is C. an oyster.

The rest of the options are common food items and therefore not worthy of a dare.

C. An oyster

Explanation:

If the narrator says that he/she is daring to do something is correct to say an oyster. Peach, is a common fruit, a biscuit a something delicius that we assume that the narrator has eaten. The same happens with tea cakes which are not a dare because people usually eat tea cakes in the afternoon or in the morning. So in this case an oyster is a dare for the narrator.