The correct option is C It will continue to move with the same speed along the original orbit of spacecraft
A ball dropped from a spacecraft revolving around the earth will have zero relative velocity with respect to the aircraft.
But with respect to the centre of the earth its speed will be equal to the speed of the aircraft, i.e. the orbital speed.
Thus, it will continue to move with same speed along the original orbit and force of gravitational of earth will provide it the necessary centripetal force.
Hence, option (c) is the correct choice.