In any sort of associative memory — be it fully associative or x-way associative, we use something called "comparators" to search for the data we require.
The comparators compare the related tags in parallel, and it employs an OR gate because even if one tag matches, we need to know.
In fully associative memory, we have a tag for each possible location (all the cache lines) of the required data. Hence, we have n tags, and need n comparators — all of which compare parallelly.
In x-way set associative memory, the data can be in any of the x lines of a known set. For which we need x comparators which again, compare parallelly.
Option A