Which statement is true about a competitive inhibitor?

B is correct. inhibitors fit into the allosteric site, not the substrate site

Actually, A is correct.

B. is true for uncompetitive inhibitors, NOT for competitive inhibitors. There are two different types. Uncompetitive inhibitors bind to an allosteric site rather than competing with the substrate for the active site, hence their name. Competitive inhibitors bind to the active site, pushing substrate out.

This also explains why competitive inhibitors alter Km but not Vmax. If you add enough substrate, eventually the substrate will out-compete the competitive inhibitor and even reach Vmax. It just takes more substrate to do that because it has competition for the active site.