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In the IPv4 addressing format, the number of networks allowed under Class $C$ addresses is:

1. $2^{14}$
2. $2^{7}$
3. $2^{21}$
4. $2^{24}$

$$\scriptsize{\begin{array}{|l|l|r|r|r|r|r|r|} \hline {\textbf{Class}} & \textbf{Leading} & \textbf{Size of network} & \textbf{Size of rest}& \textbf{Number of}& \textbf{Addresses} & \textbf{Total} & {\textbf{Start} }& \textbf{End} \\ & \textbf{Bits} & \textbf{number bit} & \textbf{bit field} & \textbf{networks} & \textbf{per} & \textbf{Addresses} & \textbf{address} & \textbf{address} \\ & & \textbf{field} & \textbf{} && \textbf{network} & \textbf{in class} & \\\hline \text{Class A} & \text{0} & \text{8}& \text{24} & \text{128 }& \text{16,777,216} & \text{2,147,483,648} & \text{0.0.0.0}& \text{127.255.255.255} \\ &&&&(2^7)& \text{(2^{24})} & \text{(2^{31})}\\\hline \text{Class B} & \text{10} & \text{16}& \text{16} & \text{16,384}& \text{65,536} & \text{1,073,741,824} & \text{128.0.0.0}& \text{191.255.255.255} \\ &&&&(2^{14})& (2^{16}) & \text{(2^{30})}\\\hline \text{Class C} & \text{110} & \text{24}& \text{8} & \text{2,097,152}& \text{256} & \text{536,870,912} & \text{192.0.0.0}& \text{223.255.255.255} \\ &&&& \text{(2^{21})} &(2^8)& \text{(2^{29})} \\\hline \text{Class D} & \text{1110} & \text{Not defined}& \text{Not defined} & \text{Not defined}& \text{Not defined} & \text{268,435,456} & \text{224.0.0.0}& \text{239.255.255.255} \\ &&&& && \text{(2^{28})} \\\hline \text{Class E} & \text{1111} & \text{Not defined}& \text{Not defined} & \text{Not defined}& \text{Not defined} & \text{268,435,456} & \text{240.0.0.0}& \text{255.255.255.255} \\ &&&& && \text{(2^{28})} \\\hline\end{array}}$$

We have $32\text{ bits}$ in the $\text{IPV4}$ network

Class A $=\text{ 8 network bits + 24 Host bits}$

Class B $=\text{ 16 network bits + 16 Host bits}$

Class C $=\text{ 24 network bits + 8 host bits}$

Class D (multicast)

Now for Class C we have $3\text{ bits}$ reserved for the network id.
Hence remaining bits are $21.$ Therefore total number of networks possible are $2^{21}$.

Similarly in Class B we have $2\text{ bits}$ reserved.
Hence, total number of networks in Class B are $2^{14}$.

And we have $1\text{ bit}$ reserved in Class A, therefore there are $2^7$ networks.

A better reasoning for the bit reservation is given at: https://en.wikipedia.org/wiki/Classful_network

Isnt the correct answer be 221-2, because first and last network IDs are not used as Network ID of any network

@anchitjindal07 the question asks for the number of networks "allowed" in class C network, and therefore base address and broadcast address are also allowed in it.

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