Exponential growth is observed in a population when both the resources in the habitat are unlimited and each species has the ability to realize its full innate potential. Let's break down the options and understand why option C is the correct answer.

a) Resources in the habitat are unlimited:
When resources in the habitat are unlimited, it means that there is an abundant supply of food, water, shelter, and other necessities for the population. In such a scenario, the population can grow without any constraints or limitations. This leads to exponential growth as individuals have access to all the resources they need for survival and reproduction.

b) Each species has the ability to realize its full innate potential:
When each species has the ability to realize its full innate potential, it means that individuals in the population are able to reach their maximum reproductive capacity. This can happen when there are no external factors limiting their reproduction, such as predation, disease, or competition for resources. When individuals are able to reproduce at their maximum potential, the population grows exponentially.

c) Both (a) and (b):
The correct answer is option C, which states that exponential growth occurs when both resources in the habitat are unlimited and each species has the ability to realize its full innate potential. When both of these conditions are met, the population can grow rapidly and exponentially.

Exponential growth is characterized by a rapid increase in population size over time. It follows a J-shaped curve, where the population starts off slowly, but as more individuals reproduce, the population growth rate accelerates. This type of growth is unsustainable in the long run as resources will eventually become limited, leading to a decrease in population size or a shift to a different growth pattern.

In summary, exponential growth occurs when resources in the habitat are unlimited and each species has the ability to realize its full innate potential. This leads to a rapid increase in population size over time. However, in natural ecosystems, exponential growth is not sustainable in the long term as resources become limited and other limiting factors come into play.