If a natural monopoly is forced to use marginal cost pricing,which of the following is not true?

Question

Quizplus · Accepted Answer

If a natural monopoly is forced to use marginal cost pricing, average total costs will decrease due to the spreading of fixed costs over a larger output level. Therefore, A is not true. Output will increase as the firm will produce at the point where marginal cost equals price, and allocative efficiency will be achieved as marginal cost pricing ensures that resources are allocated to their most productive uses.

If a Natural Monopoly Is Forced to Use Marginal Cost