**Core Concept**
The organ of Corti is a sensory organ located within the inner ear, responsible for converting sound vibrations into electrical signals that are transmitted to the brain. It is a critical component of the auditory system, enabling humans to perceive and interpret sound waves.

**Why the Correct Answer is Right**
The organ of Corti is situated within the cochlea, a spiral-shaped structure in the inner ear. It is nestled between the basilar membrane and the scala media, where it comes into contact with sound vibrations. The basilar membrane plays a crucial role in sound processing, as its stiffness and tension vary along its length, allowing different frequency ranges to be detected. The organ of Corti consists of specialized sensory hair cells that respond to sound-induced vibrations, converting them into electrical signals that are transmitted to the auditory nerve.

**Why Each Wrong Option is Incorrect**
**Option A:** This option is incorrect because the organ of Corti is not located in the vestibular system, which is responsible for balance and equilibrium.
**Option B:** This option is incorrect because the organ of Corti is not situated in the middle ear, which contains the eardrum and ossicles responsible for sound transmission.
**Option C:** This option is incorrect because the organ of Corti is not located in the auditory nerve, which is responsible for transmitting electrical signals from the inner ear to the brain.

**Clinical Pearl / High-Yield Fact**
It's essential to remember that the organ of Corti is responsible for sound processing, while the vestibular system is responsible for balance and equilibrium. This distinction is crucial in diagnosing and managing conditions affecting the auditory and vestibular systems.

**Correct Answer: C. Cochlea. Organ of Corti is located within the cochlea.**