There are trick with the words. For example in A, what is "to identify trafic" or in C. what is "to categorize traffic?". sot in some times and contexts, both concepts could be similar.
However, when we talk about something do any task automatically, there must be an algorithm to do that task continuously. In this sense, DiffServ is not an algorithm that deploy a task, rather it is a model. In this sense, I discard A, and I choose C.
The function of DiffServ is discussed in your PDF file on page 317. It operates by categorizing traffic into different classes that require specific Quality of Service (QoS) treatment, which is why the correct answer is:
C. It categorizes traffic.
Here is the relevant excerpt from the document:
"DiffServ model: This model operates on classes that require special QoS treatment. QoS components used in the DiffServ model include classification, marking, congestion management, congestion avoidance, policing and shaping, and link efficiency"
Answer is C. IntServ provides reserve bandwidth by using RSVP not DiffServ
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