Considering this question, i think the concept used is wrong coz direction of E produced due to changing magnetic field is along the circular loop(tangential at each point on loop) of radius r. While if we use the formula for displacement current $$i_d= \epsilon_0 \frac{d\phi_E}{dt}$$ where $\phi_E$ should be electric flux through circle of radius r, but since E produced is along loop and perpendicular to the area vector of circle of radius r thus $\phi_E$ should be 0.
So, is the solution wrong?