Step 1: Plato's Theory of Forms in the Phaedo
Socrates argues that beauty in the material world is not self-sufficient. Instead, particular things are beautiful because they participate in, or reflect, the eternal Form of Beauty. This Form exists beyond sensory perception.
Step 2: Examine the options
(A) Suggests beauty is based only on colour, shape, or size → this is more materialistic, not Platonic.
(B) Suggests beauty is only subjective, dependent on the observer → again, not Plato's view.
(C) Correct. Plato holds that things are beautiful because of the presence (parousia) of Beauty itself.
(D) Suggests beauty is illusion → too skeptical, more aligned with later critiques, not Plato's own teaching.
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\boxed{\text{Correct Answer: (C)}}
\]