Final answer:
Ammonia displaces water in the formation of [Cu(NH₃)₄]²+ due to it being a stronger Lewis base and more readily donating a lone pair of electrons.
Step-by-step explanation:
Ammonia (NH₃) is known to displace water (H₂O) in the formation of the complex ion [Cu(NH₃)₄]²+ because of its properties as a stronger Lewis base compared to water. This causes ammonia to be more effective at donating a lone pair of electrons to the copper ion, forming a stronger complex.
Statements II and III are correct: NH₃ is a stronger Lewis base than H₂O, and NH₃ donates a lone pair of electrons more readily than does H₂O. The number of lone pairs is not directly relevant to the displacement process, thereby making statement I incorrect. Thus, the correct options are II and III, leading to the answer (C) II and III only.