The development of popular literary forms, such as japanese kabuki theater,
1. restricted the use of the performing arts to the political elite
2. caused a decline in literacy rates among most urban dwellers
3. provided an opportunity for writers, artists, and actors to acquire higher social standing
4. gave merchants the opportunity to acquire political and economic prestige

The answer is number 3, provided an opportunity for writers, artists and actors to acquire higher social standing.

Explanation:

The Japanese Kabuki theater flourished in the 17th century. It came about when a girl named "Izumo no Okoni" started a new style of dancing. It caught the attention of many people and it gradually became popular.

Kabuki is a form of Japanese drama that incorporates music, dancing and acting in one. The actors wear colorful costumes and most of the time, their play depicts the happenings in society. This spark the interest of many writers, artists and actors who were eager to express themselves through the play. Thus, they became popular and were able to acquire higher social standing because people recognized them well.

Number 1 is incorrect because the Japanaese Kabuki theater was also played in town. This means many towns people witnessed it.

Number 2 is incorrect because Japanese Kabuki theater actually increased the people'es literacy rate. Many people learned what was happening in society through the actors and the message of the play.

Number 4 is incorrect because the Japanese Kabuki theater was already happening when the merchants were in economic prestige. It wasn't the reason why they rose on the social and economic scale.

Thus, number 3 is correct.