Correct option: The pulmonary disease in which alveolar surface area involved in gas exchange is drastically reduced due to damage in the alveolar walls is  Emphysema.

Solution:

• It involves the gradual damage of the lung tissues (damage of alveolar walls).
• It occurs due to long term -exposure airborne irritant and tobacco.
• The surfactant present over the surface of the alveoli decreases due to which chronic breathing issues arises.