Final answer:
Polychromasia in a peripheral blood smear is best explained by an increased number of reticulocytes, indicating that the body is producing more red blood cells in response to certain conditions.
Step-by-step explanation:
The observation that would best explain why a peripheral blood smear is exhibiting polychromasia is an increased number of reticulocytes. Polychromasia refers to the presence of lightly-stained red blood cells (RBCs) with a greyish-blue hue on the blood smear, which are usually young RBCs, or reticulocytes, that still contain some ribosomal RNA. An increased amount of reticulocytes indicates that the body is producing more RBCs, perhaps in response to anemia or other conditions that affect RBC levels.