Despite its famous __________ standards, this small publishing house has had several novels appeal to a broad audience.

The use of the word "discriminating" in this context highlights the publishing house's reputation for having high standards or being selective in its choice of novels. This suggests that they carefully evaluate the quality of the works they publish, which is a hallmark of discerning or sophisticated taste.

By stating that despite these "discriminating" standards, the publishing house has successfully published novels that have appealed to a broad audience, it implies that their curated selection does not limit them to niche markets. Instead, it reinforces the idea that high-quality literature can resonate widely, bridging the gap between selectivity and popularity.

The other choices do not convey the same meaning in this context. For example, "proletarian" refers to working-class themes and might suggest a narrower focus, while "naturalistic" relates to a specific literary style emphasizing realistic representation, which may not necessarily pertain to the standards of selection. "Imitative" suggests a lack of originality or creativity, which contradicts the positive connotation of having high standards. Thus, "discriminating" best captures the essence of having selective and refined standards that still manage to appeal to a broader market.