The Figure Below Shows Revenue and Cost Curves of a Natural

Multiple Choice

The figure below shows revenue and cost curves of a natural monopoly firm. Figure 12.1 In the figure,
D: Demand curve
MR: Marginal revenue curve
MC: Marginal cost curve
ATC: Average total cost curve
Refer to Figure 12.1.If the regulatory agency sets the fair-rate-of-return price, the monopolist will:

A) suspend production.
B) just break even.
C) earn super normal profits.
D) incur losses.
E) be able to cover only the variable costs.