If the Government Requires a Natural Monopoly to Price at Marginal

Multiple Choice

If the government requires a natural monopoly to price at marginal cost,

A) monopoly firms will earn zero economic profits because the price of the good equals the cost of producing that good.
B) monopoly firms will operate at a loss because P < AC.
C) more firms will be able to enter the market.
D) producer surplus will increase because quantity supplied is greater.