I want the Cloth to drape over the cup, but It creates gap between them Can someone tell me why this happens? I created a plane, subdivided it to 50, and smoothed it, and went to the physics, and clicked on cloth, then selected the cup, saucer and plane and went to physics and clicked on collision, but when I play the animation, it gets space from the cup.
Decrease the "inner" and "outer" values from the Collision settings of the vase. 

A good value should be around 1/100th of the vase width (that you can check by selecting the vase and hitting N while in the 3d viewport: look under "dimensions") or anyway at least 1/10th of what you have now. You'll need some trial and error anyway.

PS increase the cloth Steps to ~10 and the cloth collision Quality to at least 3 or you'll risk the cloth to go through the vase.