Chlorine gas reacts with potassium iodide solution to form potassium chloride and iodine. This reaction is an example of a:

Correct option is C

The reaction between chlorine gas and potassium iodide solution to form potassium chloride and iodine is an example of a displacement reaction.​$$\text{Cl}_2 (g) + 2\text{KI} (aq) \rightarrow 2\text{KCl} (aq) + \text{I}_2 (aq)$$

Chlorine (Cl2_22​) displaces iodine (I2_22​) from potassium iodide (KI), replacing it with chloride ions (Cl−^-−). This is a displacement or replacement reaction, where a more reactive element (chlorine) displaces a less reactive one (iodine) from a compound.

A combination reaction is a type of chemical reaction where two or more substances combine to form a single product.

$$A+B\to AB$$

A decomposition reaction is a type of chemical reaction in which a single compound breaks down into two or more simpler substances