1. The new chairs and sofabeds, displayed so brightly in the department store window, receives many stares from the passers-by. 

A.  displayed so brightly in the department store window, receives

B.     which are displayed so brightly in the department store window, and receives

C.      are displayed so brightly in the department store window, receive

D.     being displayed so brightly in the department store window, and receiving

E.     displayed so brightly in the department store window, receive

The new chairs and sofabeds, displayed so brightly in the department store window, receives many stares from the passers-by.

Grammar issue presented: subject/verb agreement

The subject of the sentence - new chairs and sofabeds - is plural, and a plural verb must follow.  displayed so brightly in the department store window is a modifying phrase.

NOTE: Modifying phrases are often used to obscure agreement issues by splitting apart subject and verb.

A. displayed so brightly in the department store window- receives
- receives (singular verb form) Agrees: NO

B. which are displayed so brightly in the department store window, and receives
- receives (singular verb form) Agrees: NO

C.  are displayed so brightly in the department store window, receive
- receive (plural verb form) Agrees: YES
Additional errors? Run-on sentence!

D.    being displayed so brightly in the department store window, and receiving
- receiving (progressive verb form) Agrees: NO!
Additional errors? Sentence fragment.

E.     displayed so brightly in the department store window, receive
-  receive (plural verb form) Agrees: YES
Additional errors? None

(E) is correct because it is the only choice in which the verb agrees with the subject by being in the plural form without creating further errors.

Q.1 Easy

Q.2 Easy