The $n$-bit binary counter takes in $n$ bits, and can output one of $2^n$ possible states.
Out of these $2^n$ states, $n$ states are taken in by the decoder, which outputs one of the $2^n$ possible states.
We're mapping $2^n$ states to $2^n$ states.
=> $k$ states to $k$ states.
This is the property of ring counters.
Option C