Why do you think Candy allowed Carlson to kill his dog? How does candy feel about incident? How do others react during the incident and why?

Candy is set apart from the other workers on the ranch by his advanced age, his physical handicap, and his extended work in the same location.  But nothing distinguishes him quite like his companion, his old, crippled, mangy, half-blind dog.  Like George, Candy has a friend.  He does not have to travel through life without the solace of someone (or something) to share it with.  Carlson seems resentful of the dog's presence in the bunkhouse:...

Candy is set apart from the other workers on the ranch by his advanced age, his physical handicap, and his extended work in the same location.  But nothing distinguishes him quite like his companion, his old, crippled, mangy, half-blind dog.  Like George, Candy has a friend.  He does not have to travel through life without the solace of someone (or something) to share it with.  Carlson seems resentful of the dog's presence in the bunkhouse:  

"Well, I can’t stand him in here,” said Carlson. “That stink hangs around even after he’s gone.” He walked over with his heavy-legged stride and looked down at the dog. “Got no teeth,” he said. “He’s all stiff with rheumatism. He ain’t no good to you, Candy. An’ he ain’t no good to himself. Why’n’t you shoot him, Candy?”

Shoot him?  Seems a bit drastic, doesn't it?  If the dog smells, why not just put him outside?  Candy explains that he has had the dog since he was a pup, that he doesn't mind taking care of him, that shooting him might hurt him--but none of these reasons sway Carlson from his mission.  Both men look to Slim for the final decision without actually asking him aloud.  Slim, who is seen as the leader among the workers, does not give Candy the reprieve he hoped for:

Candy looked a long time at Slim to try to find some reversal. And Slim gave him none. At last Candy said softly and hopelessly, “Awright—take ‘im.” He did not look down at the dog at all. He lay back on his bunk and crossed his arms behind his head and stared at the ceiling.

At this point, Candy does not feel he has any option.  He tells Carlson to go ahead and take his best friend out to his death.

The other characters, strangely, seem to be completely indifferent to the events transporting between Carlson and Candy.  They play cards and discuss the letter to the editor that Whit found in a magazine, which has its own symbolic value.  But they are largely uncaring about Candy's plight.