Here in the question given I am confused how to relate the altitude with the given plot of total drag and velocity.
At higher altitude, density is lower. For the same true airspeed and the same drag coefficient, higher altitude will have less total drag.
However, there are factors affecting drag coefficient itself:
- Due to the lower density, the lift coefficient must increase for the same TAS. This results in increased induced drag.
- Decreasing density also decreases the Reynolds number, which increases the skin friction drag, especially for speeds as low as the ones shown in your graph.
Therefore, it can be expected that the trend will invert below a critical speed.
The answer is h2 > h1 from the above rationale.