The correct answer is option 1: Algae and fungi represent a symbiotic relationship in lichens. A symbiotic relationship refers to a close, long-term interaction between two species where both benefit. Lichens are formed when algae and fungi come together and form a unique partnership.

The algae, which are photosynthetic organisms, provide food through photosynthesis. They produce carbohydrates and other organic compounds that are essential for the survival of both partners. The fungi, on the other hand, provide a protective structure and absorb and retain water and nutrients from the environment. They also provide a habitat for the algae to grow.

This mutualistic relationship allows both partners to thrive in harsh environments where they would not be able to survive alone. Lichens can be found in various habitats, including deserts, rocky surfaces, and even Antarctica. They are extremely resilient and can tolerate extreme temperatures, high radiation levels, and low nutrient availability.

It is important to note that while lichens consist of algae and fungi, they are distinct entities in themselves and can have different physical appearances and characteristics depending on the species.