This question deals with average speed and decreasing speed percentages.

In the first hour, the runner covers 16 km. In the next hour, his speed decreases by 25%, meaning he runs 75% as fast, covering 12 km (16 km * 75%). In the third hour, his speed decreases by another 25% of 12 km, leaving him running at 9 km (12 km * 75%).

The total distance covered in 3 hours is 16 km (1st hr) + 12 km (2nd hr) + 9 km (3rd hr) = 37 km.

Average speed equals total distance divided by total time. Therefore, the average speed is 37 km divided by 3 hours, which equals approximately 12.33 km/hr.

Option 1 says 12 km/hr, which is less than the calculated average speed.

Option 3 proposes 10.33 km/hr, which is too low since even in his slowest hour, the runner ran more than that.

Option 4 suggests 13 km/hr, which is higher than the actual average speed.

Therefore, based on the given scenario, option 2, which is 12.33 km/hr, is correct.