Increasing the RAM of a computer typically improves performance because:
Virtual Memory increases
Larger RAMs are faster
Fewer page faults occur
Fewer segmentation faults occur
So, answer $\rightarrow $ (C).
Virtual Memory increases $\rightarrow $ This option is false. Because Virtual Memory of Computer do not depend on RAM. Virtual Memory concept iteself was introduced so Programs larger than RAM can be executed.
Larger RAMs are faster $\rightarrow $ No This option is false. Size of ram does not determine it's speed, Type of ram does, SRAM is faster, DRAM is slower.
Fewer page faults occur $\rightarrow $ This is true, more pages can be in Main memory .
Fewer segmentation faults occur $\rightarrow $ "Segementation Fault" $\rightarrow $ A segmentation fault (aka segfault) is a common condition that causes programs to crash; they are often associated with a file named core . Segfaults are caused by a program trying to read or write an illegal memory location. It is clear that segmentation fault is not related to size of main memory. This is false.
VM in a system can be increased up to maximum free size available on secondary storage.