Right choice is (a) Increasing the gain
Easiest explanation: We note that this circuit is an example of a degenerated C.S. stage. If the impedance connected at the source terminal is very low, the voltage gain of the circuit increases. The capacitor is called a bypass capacitor as it helps to provide a path of much less resistance than R5. The magnitude of capacitance can be controlled, to an extent, according to the frequency of operation.