The correct answer is C) decrease pump capacity. Increasing the rotor clearances in a rotary pump will result in a decrease in the pump's capacity. This is because larger rotor clearances allow more internal leakage within the pump, reducing the volume of fluid that can be effectively pumped per rotation. The other answer choices are incorrect. Increasing rotor clearances would not increase discharge pressure (A), as that would require the pump to overcome greater internal losses. It would also not decrease pump cavitation (B), as cavitation is typically caused by factors like suction conditions, not rotor clearances. Finally, decreasing reaction ring clearance (D) is the opposite of what increasing rotor clearances would do.