If We Compare Regulating a Natural Monopoly Using a Marginal

Multiple Choice

If we compare regulating a natural monopoly using a marginal cost pricing rule to using an average cost pricing rule, we see that output is

A) greater with marginal cost pricing, but average cost pricing allows for costs to be covered.
B) the same under both cases, but the profit is greater with average cost pricing.
C) the same but profits are greater with marginal cost pricing.
D) greater with marginal cost pricing, and the firm's profit is larger with marginal cost pricing.
E) greater under average cost pricing, but profits are greater with marginal cost pricing.