Under a policy of average-cost pricing, the government ______

A. picks a point on the demand curve where price equals average cost.
B. picks a point on the demand curve where price equals marginal cost.
C. picks a point on the demand curve where price equals marginal revenue.
D. picks a price such that marginal revenue is equal to marginal cost.
E. sets the price equal to consumers' marginal willingness to pay.

Correct Answer: A

This is the definition of average-cost pricing.