After the supreme court ruling in 1886, state governments were no longer allowed to regulate private businesses for the public good continued to enact laws regulating railroads that passed through their states saw their power to regulate railroads greatly reduced were only allowed to regulate interstate commerce

The correct answer here is the third option.

After the Supreme Court ruling of 1886, in 1887 the Interstate Commerce Act of 1887 was enacted and it reduced the powers of individual state governments to regulate railroads as it introduced federal guidelines and rules that were there to regulate the railroads on a federal scale.