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(A) The writer bases his argument on another argument that contains circular reasoning.
there's no other argument . incorrect

(B) The writer has illogically classified two disparate groups together when there is no relationship between them, except that they both have the same attribute.
correct.there can be other animals with same color as it's not stated only elephants and mice are grey, which could have been a much closer argument. elephants and mice resides in the circle of the grey but just as the part ,in which case they may or may not overlap.thus can not conclude all elephants are mice

(C) The writer has made a mistaken analogy between two dissimilar qualities.
incorrect .both have a similar quality which is color grey

(D) The writer has used a fallacy which involves the ambiguous description of animals by their color.
incorrect
(E) The writer has failed to express his reasoning fully.
out of scope
IMO B
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