Step 1: Using the formula for longitudinal strain.
The longitudinal strain \( \epsilon \) is given by the formula:
\[
\epsilon = \frac{\Delta L}{L} = \frac{F}{A Y}
\]
where \( F = Mg \) is the force and \( A = \pi r^2 \) is the cross-sectional area. The change in radius \( \Delta r \) is related to the strain and Poisson's ratio \( \sigma \).
Step 2: Using Poisson's ratio.
The decrease in the radius \( \Delta r \) is given by the formula:
\[
\Delta r = \frac{\Delta L \sigma}{L}
\]
Substituting the values, we get the result:
\[
\Delta r = \frac{Mg \sigma}{\pi Y}
\]
Step 3: Conclusion.
Thus, the decrease in the radius of the wire is \( \frac{Mg \sigma}{\pi Y} \), which corresponds to option (B).