Which language was used predominantly in the earliest inscriptions?

Prakrit

The correct answer is Option (1) → Prakrit

Most scripts used to write modern Indian languages are derived from Brahmi, the script used in most Asokan inscriptions. From the late eighteenth century, European scholars aided by Indian pandits worked backwards from contemporary Bengali and Devanagari (the script used to write Hindi) manuscripts, comparing their letters with older specimens. Scholars who studied early inscriptions sometimes assumed these were in Sanskrit, although the earliest inscriptions were, in fact, in Prakrit. It was only after decades of painstaking investigations by several epigraphists that James Prinsep was able to decipher Asokan Brahmi in 1838.