The correct option is
D Are sold
NOTE: The word 'by' indicates that the sentence is in the passive voice. Also, the subject 'the grocer' has become the object in the given sentence.
We use 'is/am/are' with the past participle form of the verb, to explain the sentence in the simple present tense in the passive voice.
Option A - As the subject is plural 'sugar and tea', we can't use 'is'. According to the subject-verb agreement, we need the verb in the plural form if the subject is plural. 'Sold' is the past participle form of the verb and can be used with 'are' and not 'is'. Thus option A is incorrect.
Option C - According to the subject-verb agreement, we need the verb in the plural form if the subject is plural. The given sentence has a plural subject and hence we can't use 'is' here, as it is the singular form of the verb. Also, in the passive voice, we need the verb in the past participle form of the sentence/action in the simple present tense. Hence, option C is incorrect.
Option D - The given sentence has a plural subject, and hence we can use 'are' here. 'Sell' is the verb in its original form and we need the verb in the past participle form. Hence, option D is incorrect.
Option B - According to the subject-verb agreement, 'are' can be used with the plural subject here and 'sold' is in the past participle form of the verb 'sell'. Hence, option B is the correct answer.
'Sugar and tea are sold by the grocer.'