The correct option is B a doctor and his sister attempting to improve the doctor's daughter
"Try and make a clever woman of her Lavinia; I should like her to be a clever woman."
Mrs. Penniman, at this, looked thoughtful a moment. "My dear Austin," she then inquired, "do you think it is better to be clever than to be good?"
"Good for what?" asked the doctor. "You are good for nothing unless you are clever." - this conversation between the doctor and Mrs. Penniman, who is his sister as we come to know in the course of the passage, are discussing the upbringing of a 'her.' This 'her' is Catherine, the doctor's daughter. We can conclude from here that the story is about a doctor and his sister bringing up the doctor's daughter and trying to improve her through this upbringing. Option C is the best answer here.