The best choice for improving the sentence's clarity and flow is:
(Choice D) statues
So, the complete sentence would read:
"Since the discovery of China's Terracotta Army in 1974, archaeologists have studied the 7,000 statues, they have not yet determined if each statue was based on an actual person."
However, please note that the sentence may need further restructuring (such as using a conjunction or a semicolon) to correct a run-on sentence. For instance:
"Since the discovery of China's Terracotta Army in 1974, archaeologists have studied the 7,000 statues; however, they have not yet determined if each statue was based on an actual person."