If Average Total Costs for a Natural Monopoly Are Declining

Multiple Choice

If average total costs for a natural monopoly are declining where they intersect the demand curve, and government regulators set the price equal to marginal cost, then the firm will

A) likely earn a profit.
B) likely break even.
C) likely suffer a loss.
D) surely go out of business.
E) There is not enough information to answer this question.