The correct answer is:
C. as a p-type semiconductor with the pegs representing electrons and the holes representing positive charges
The pegs represent the electrons and the holes represent the positive charges: when a peg is moved, it can be seen as an electron moving, and this peg (the electron) occupies a new hole (so, it recombines with the hole) leaving behind a free hole.
Moreover, a p-type semiconductor has a larger concentration of holes than electrons, and the same is true for the puzzle (we have in fact 18 pairs of pegs-holes (electrons-holes), and then we have 2 free holes, so the concentration of holes is larger).