Choice C is the best answer. The main purpose of the first paragraph is to establish the passage's setting by describing a place and an object. The place is the Alcazar Restaurant, which is described as being "long and narrow" and decorated with "art moderne," murals, and plants (lines 2-6,"near... window"), and the object is the history book Lymie is reading.
Choice A is incorrect because rather than establishing what Lymie does every night, the first paragraph describes what Lymie is doing on one night. Choice B is incorrect because nothing in the first paragraph indicates when the passage takes place, as the details provided (such as the restaurant and the book) are not specific to one era. Choice D is incorrect because nothing in the first paragraph clearly foreshadows a later event.