The correct option is B n+1
The way C is defined in the question, it contains only comparable subsets of A.
i.e. the set C is the set of all comparable subsets of the set A. Such a set is called a chain.
Consider an example with set A={1,2}
Subsets are ϕ,{1},{2} and {1,2}
Maximum cardinality of collection of distinct subsets is {ϕ,{1} and {1,2}} i.e. 3
So with n elements maximum cardinality is n+1.