7. From the graph you drew to answer Exercise 11.6, would you say this transit system is a natural monopoly?

Justify.

Use the following information to answer the next three questions. In the years before wireless phones, when telephone technology required having a wire running to every home, it seemed plausible that telephone service had diminishing average costs and might need to be regulated like a natural monopoly. For most of the twentieth century, the national U.S. phone company was AT&T, and the company functioned as a regulated monopoly. Think about the deregulation of the U.S. telecommunications industry that has happened over the last few decades. (This is not a research assignment, but a thought assignment based on what you have learned in this chapter.)