(a) That's right. When, at the time of contracting, a buyer makes known to a seller the purposes for which they require the goods in question, and indicates that they are relying on the seller's skill and judgement to choose suitable goods, then the sale of goods legislation implies a term into the contract that the goods will be reasonably fit for the buyer's stated purpose. However, this is only so when the seller is a dealer in goods of the type in question. See a list of the relevant sections.
In this case, A has made it known to B that she requires food suitable for alpacas. She also indicates she is relying on B, a dealer in animal food, to supply something suitable for this particular purpose. So it would not be enough for the food supplied to be of merchantable quality as 'animal food' - it would have to be food suitable for feeding to alpacas.