Answer is : (b) S is the empty set
x and y are positive integer
x2 - y2 = 12345678
RHS 12345678 is and even number and last digit is 8.
∴ The last digit of x be 3, 7
and the last digit of y be 1, 9
∴x and y must be odd and square of difference is multiple of 8 but RHS is not multiple of 8.
∴ S is the empty set.