Gandalf is happy to see Bilbo because he wants to take him to Thorin, as shown in option B.
We can arrive at this answer because:
Gandalf has a strong affection for Bilbo on account of his courage and loyalty and he would be very sad if Bilbo were to die in battle. besides, he saw in Bilbo a great friend and was happy to be able to help him.
This question is about "The Lord of the Rings."
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