Order the following steps that a natural monopoly might take to set its pricing strategy while ensuring allocative efficiency: A) Set prices below average total cost; B) Analyze marginal cost of production; C) Adjust production levels based on consumer demand; D) Evaluate potential government interventions.

A natural monopoly is a type of market where one company can supply the entire market's demand more efficiently than multiple companies could. To set its pricing strategy and ensure allocative efficiency, the first step is to analyze the marginal cost of production, which helps the company understand the cost of producing one more unit of its product. After that, the company would adjust production levels based on consumer demand to ensure it is producing the right amount of goods that people want to buy. Setting prices below average total cost might be necessary to attract more customers and ensure that everyone can access the product. Finally, the company would evaluate potential government interventions to ensure its pricing strategy aligns with regulations and serves the public interest.