questioner wrote:

*v*:*x*:*y*:*z* = 1:10:10:11 then the median = 10, thus answer should be "A"?

The set {1, 10, 10, 11} also satisfies the requirements of the original question statement:

Its median is (10 + 10)/2 = 20/2 = 10.

Its average is (1 + 10 + 10 + 11)/4 = 32/4 = 8.

BUT does the smallest barrel have the MAXIMUM POSSIBLE capacity for such requirements?

No, it does NOT. The capacity of the smallest barrel can be greater, e.g. 2, if the corresponding set is {2, 10, 10, 10}.

In GMAT questions, as also in any other questions as well, you should always keep in mind what a question asks you. In other words, what your goal is.