The correct answer is option 4: the average increases by 3.

To understand why, let`s consider the given information. We know that we have 7 consecutive odd numbers and their average is M. This means that the middle number in the set of 7 odd numbers is also equal to M.

Now, if we include the next 3 odd numbers, we are essentially adding 3 more numbers to our set. These numbers will be consecutive after the previous 7 odd numbers.

Since the numbers are all odd, we can see that the difference between each consecutive odd number is 2. So, when we add 3 more odd numbers, the last number in the set will be 6 more than the middle number (3 * 2 = 6).

Therefore, when we include these 3 additional odd numbers, the average of the entire set will increase by 6/10 or 0.6. However, since we are dealing with whole numbers, the average will round up to 1.

Hence, the correct answer is option 4: the average increases by 3.