Low concentration of oxygen in the blood and tissues of people living at high altitude is due to ____________.

At higher altitudes, the layer of atmosphere is not as dense as it is on the sea level.

Thus, the atmospheric pressure decreases and the solubility of gases also decreases.

The presence of oxygen gas is less in the atmosphere at higher altitudes due to the above reason. Thus, people living in higher altitudes have a low concentration of oxygen in the blood.

Thus, Option 2 is the correct answer.