Use the Information Below to Answer the Following Questions

Multiple Choice

Use the information below to answer the following questions.
Fact 12.5.1
Cascade Springs Inc.is a natural monopoly that bottles water from a spring high in the Rocky Mountains.The total fixed cost it incurs is $80,000,and its marginal cost is 10 cents a bottle.The demand curve for Cascade Springs bottled water is shown in the following figure: Figure 12.5.1
-Refer to Figure 12.5.1.Suppose the government regulates the firm with average cost pricing.The price of a bottle of water is

A) $0.
B) $0.50.
C) $0.30.
D) $0.10.
E) $0.20.