The given reaction is an elimination reaction using alcoholic KOH as the base. Under such conditions, the reaction favors the formation of an alkene via the E2 mechanism. The elimination occurs by the removal of the ff-hydrogen, leading to the formation of the most stable (more substituted) alkene as the major product. In this case, the product formed is a highly substituted alkene, making option (2) the correct answer.
Nucleophiles attack at that part of the substrate molecule which is electron deficient. The reaction in which a nucleophile replaces an already existing nucleophile in a molecule is called a nucleophilic substitution reaction. Haloalkanes are substrates in these reactions. In this type of reaction, a nucleophile reacts with a haloalkane (the substrate) having a partial positive charge on the carbon atom bonded to halogen. A substitution reaction takes place, and the halogen atom, called the leaving group, departs as a halide ion. Since the substitution reaction is initiated by a nucleophile, it is called a nucleophilic substitution reaction.
\(Nu^− +C-X →C-Nu+X^−\)