The correct recommendation for this firm would be:
b. Continue to produce the current output rate, because P > AVC.
This is because the firm is currently producing at a level where the marginal cost (MC) is equal to the marginal revenue (MR), which means it is maximizing its profit. Additionally, the firm is covering its average variable cost (AVC) as P is greater than AVC. Since the firm is able to cover its variable costs and earn a profit, it would be advisable for it to continue producing at the current output rate.