**Core Concept**
The question tests the understanding of muscarinic receptor subtypes and their effects on vascular tone. Muscarinic receptors are part of the cholinergic system, which employs **acetylcholine** as a neurotransmitter. These receptors are involved in various physiological functions, including the regulation of blood vessel diameter.

**Why the Correct Answer is Right**
The correct answer is related to the muscarinic receptor subtype that, when activated, leads to the relaxation of vascular smooth muscle, resulting in vasodilation. This is primarily mediated through the **M3 muscarinic receptor**, which is coupled to **Gq proteins** and stimulates the production of **nitric oxide (NO)**, a potent vasodilator.

**Why Each Wrong Option is Incorrect**
**Option A:** Incorrect because it does not typically cause vasodilation.
**Option B:** Incorrect as it is not the primary receptor involved in vasodilation.
**Option C:** This is the correct option, so it's not incorrect, but **Option D:** is incorrect because it is not associated with the dilatation of vessels.

**Clinical Pearl / High-Yield Fact**
Remember that muscarinic receptors, particularly the **M3 subtype**, play a significant role in the endothelium-dependent relaxation of blood vessels. This knowledge is crucial for understanding the pathophysiology of various vascular disorders.

**Correct Answer:** D. M3 receptor causes dilatation of vessels