Statement: Many shops in the local market have extended their shops and occupied most of the footpath in front of their shops.

Analysis of the Courses of Action

• I. Activate a task force to clear encroachments: This is a direct and immediate solution that physically rectifies the problem described in the statement.
• II. Charge a hefty penalty: This action serves as both a punishment for the current violation and a strong financial deterrent against future encroachments.
• III. Set up a monitoring system: This is a proactive, long-term solution designed to prevent the problem from happening again after the initial cleanup.

Conclusion: All three actions are logical and work together. They address the problem with an immediate fix (I), a punishment/deterrent (II), and a long-term preventative measure (III).

The correct option is D. All I, II and III follow.