Step 1: Understanding the Concept:
In a p-n junction diode with reverse bias, only a small leakage current flows. As the reverse voltage is raised, the electric field across the depletion layer grows.
Step 2: Breakdown:
At a certain large reverse voltage, the field is so strong that it breaks covalent bonds (Zener effect) or creates avalanche multiplication. The current then rises sharply. This is the breakdown voltage.
Step 3: Choose:
Breakdown occurs when the reverse bias is increased, option (C).
Final Answer:
Breakdown occurs on increasing the reverse bias.
\[ \boxed{C} \]