I'll give one approach, let's focus on the NMOS for now since the input of the inverter is VDD, this should be ON whereas the PMOS should be OFF. Assume the NMOS is in the triode region (a switch "fully" on). You have:
$$I_D=\mu_nC_{ox}\frac{W}{L}\bigg[(V_{GS}-V_{tn})V_{DS}-\frac{V_{DS}^2}{2}\bigg] $$
Notice that for small values of \$V_{DS}\$, the quadratic term could be negligible.
$$I_D\approx \mu_nC_{ox}\frac{W}{L}(V_{GS}-V_{tn})V_{DS} $$. So the channel resistance, is approximately,
$$ R_{DS_{on}}\approx\dfrac{V_{DS}}{I_D}=\dfrac{1}{\mu_nC_{ox}\frac{W}{L}(V_{GS}-V_{tn})}$$
With that, you can estimate how much current you can pass through the NMOS and not exceed the \$V_o\$ requirement < 0.5V since:
$$ V_o\approx I_D\cdot R_{DS_{on}}\tag1$$
You have all the values for the constants to find the channel resistance. You have \$V_o\$, so you only have to solve for \$I_D\$ in (1).
How small needs \$\dfrac{V_{DS}^2}{2}\$ to be compared to \$(V_{GS}-V_{tn})V_{DS}\$ for the approximation to be accurate?
$$(V_{GS}-V_{tn})V_{DS}>>\dfrac{V_{DS}^2}{2} $$
$$(V_{GS}-V_{tn})>>\dfrac{V_{DS}}{2}$$
$$V_{DS}<<2\cdot(V_{GS}-V_{tn}) $$
In this problem, you are looking for a \$0.5\text{V}\$ max at \$V_{DS}\$. That could be considered a lot smaller than \$2(10-2)=16\text{V}\$.
This maximum voltage requirement on the output net, just wants to ensure that Vo is low enough to be considered a '0' logic when you have '1' at the input of the inverter.
Notice that if the input voltage were 0V instead of VDD, you'd need to do follow a similar procedure for the PMOS device. In such case, you'd be looking at minimizing the drop across the PMOS on-resistance so that the output voltage is still high enough to be read as a '1'.