Correct answer:
B. Estoy sirviendo la comida.
This sentence is given in the present progressive tense. This is used when talking about something that happens now. The formula of this tense is:
Verb estar + present participle
Juan asks Pedro using the verb estar conjugated for the second person singular in the simple present. Therefore, Pedro must use the verb estar conjugated for the first person singular in the simple present, which is estoy. Finally:
Juan: ¿Qué estás sirviendo?
Pedro: Estoy sirviendo la comida.
