Read the sentence and choose the correct answer to complete it. If we hadn't missed our bus, we __ lying on the beach by now. could have been may have should have been

The correct answer is "could have been."The sentence is expressing a hypothetical situation in the past, so "could have been" is the appropriate choice. It indicates that if the event (missing the bus) hadn't occurred, the outcome (lying on the beach) would have been possible.