C is correct, because it matches the pattern and tense of the first sentence. "be/are reading" is continuous present tense. The second sentence is stating that the person now should be reading something other than the book they are currently reading. If the sentence had been "You should _____ a text book BY now", then "have read" would have been correct.

C be reading Actually, it could be (B). The difference: (C) be reading = Instead of reading the novel you should be reading a text book right now. (B) read = You should put down the novel and start reading a text book. Unfortunately, your test is poorly structured. Dare I say it was written by an ESL teacher?

The "now" is actually your clue to the correct answer! Remember that the present continuous (be reading) usually indicates an action at this moment. I realise B sounds possible because it appears to be good advice, but if it were correct, the sentence would be "You should read a text book instead (of the novel)."

One goal of good writing to maintain consistent usage of tense and the element of time throughout your text. I would consider A and D to be simply incorrect - the sentence simply does not work with them. Answer B is technically correct but switches the tense from present continuous to present. Option C uses the same tense as the prior sentence (present continuous, I think) though with the addition of the word "be". It also gives the reader the same sense of "time" as the first sentence, describing reading as an ongoing activity. Hope that helps.