Suppose the regulator in question 7 now tells the natural monopoly to follow an average cost pricing rule rather than a marginal cost pricing rule. Which of the following statements is true?a)The...

Suppose the regulator in question 7 now tells the natural monopoly to follow an average cost pricing rule rather than a marginal cost pricing rule. Which of the following statements is true?a)The monopoly would move from making a loss to making a profit.b)The monopoly would increase its output.c)The monopoly would now set its output where its AC curve intersects its AR curve.d)The monopoly’s price would be below its marginal cost.