The correct answer is option 4: Graphite is a good conductor of electricity.

In electrolytic cells, electrical current is passed through a liquid or molten solution, causing a chemical reaction to occur. To facilitate this process, electrodes are used to conduct the electricity into the solution. Graphite is commonly used as an electrode material in electrolytic cells due to its excellent electrical conductivity.

Option 1 states that graphite is soft and can be easily moulded into electrodes. Although this is true, it does not directly explain why graphite is used in electrolytic cells.

Option 2 mentions that graphite is made of layers of carbon atoms which can slide. While this is a property of graphite, it is not specifically relevant to its use in electrolytic cells.

Option 3 suggests that graphite is inert to most chemicals and remains intact in electrolytic cells. While this is partly true, the primary reason for using graphite in electrolytic cells is its conductivity rather than its chemical inertness.

In conclusion, graphite is preferred in electrolytic cells because it is a good conductor of electricity, allowing for efficient transmission of electrical current into the solution.