The question 'Are they there?' requires the subject 'they' to agree with the verb 'are'. Option C 'yes, they are' correctly uses the full form 'they are' to agree with the plural subject. Option A incorrectly uses 'there are' which doesn't match the subject. Option B uses 'they're' (they are) which is grammatically correct but typically contractions are avoided in formal responses. Option D uses 'they'll' (they will) which changes the meaning to future tense instead of present.