Step 1: Understand water potential.
Water potential ($\Psi_w$) measures the free energy of water, or how freely water can move. Pure water has the highest water potential.
Step 2: See what solutes do.
When we dissolve a solute in water, the solute particles attract and hold the water molecules around them.
Step 3: Count the free water.
Because many water molecules are now busy surrounding the solute, fewer water molecules are left free to move about.
Step 4: Link to concentration.
This means the effective concentration of free, movable water goes down. Less free water means less ability of water to move out, so the water potential falls.
Step 5: Match the wording.
The correct option says the concentration of water decreases with fewer free water molecules, which exactly matches this reasoning.
Step 6: Conclude.
So adding solute lowers water potential because there are fewer free water molecules.
\[ \boxed{\text{concentration of water decrease with fewer free water molecules}} \]