You Have Decided to Live in a Converted Loft with Eight

Multiple Choice

You have decided to live in a converted loft with eight of your college friends. The loft is a large open room and as a group you have decided to divvy up the floor space using the Last-Diminisher Method. You label yourselves P1, P2, P3, ... P8 and the order in which the method is played has P1 first, P2 second, and so on. Here is how the method begins:
Round 1: P1 makes the first cut; P2 passes; P3 diminishes; P4, P5, ... P6 pass; P7 diminishes; P8 passes
Round 2: After the first claim is made, P3 is the only diminisher.
Round 3: After the first claim is made, all the remaining players pass.
After the end of Round 3, which three players have received a share of the loft space?

A) P1, P3, and P7
B) P1, P6, and P7
C) P3, P6, and P7
D) P1, P3, and P6
E) None of the above.