Average cost falls across the whole range the market demands, which is what makes this a natural monopoly. Left alone, the firm produces where marginal revenue meets marginal cost, at point P and a quantity of 4, then reads the price off the demand curve at A: 9.3. That is above average cost of 7.75, so it earns a profit.
Splitting the firm in two puts each half at B, producing 2 at an average cost of 9.75 rather than the 7.75 one firm pays at 4, so the same output now costs more to make. Forcing price down to marginal cost puts the firm at C, a quantity of 8 at a price of 3.5, which is what a competitive market would do, but average cost there is 5.70, so the firm loses money on every unit. The workable answer is F, a quantity of 6 at a price of 6.5, where price equals average cost and the firm breaks even. The slider picks a choice and the side panel prices it out.