TeX will not break a line at the “control space”, because it's allowed to break lines in formulas only after binary operators such as
=. Glue in math mode is not an allowed break point.
The spaces in
$a,\ b$, and $c$
will be different, because TeX adds a thin space between a punctuation atom (the comma) and an ordinary atom (the ‘b’), independently of any explicit intervening glue (or penalty).
So the “correct” way should be
The three variables are just names, from a grammatical point of view, so this is no different from
Moe, Larry, and~Curly
Whether you should use the Oxford comma or not is up to your personal preference (I wouldn't).
Why no tie between
Larry, but one between
$b$? Because single variables in a text are much less prominent than a multiletter word, so it's better to help TeX in not letting it add a line break there.
I generally recommend to liberally use
~, so maybe
would be even better. If TeX is not able to correctly break the paragraph, we can decide whether to remove a tie.
What about “for i=1,2,...,n” (that I wrote in obviously wrong way here)?
The list of numbers forms a syntactical unit, so it should be
Such a choice could be debatable, so I'll stop here.