1.Let's consider the airline industry.Some economists have noted that large U.S. airlines exhibit many features of natural monopoly.

a.In what way does characterizing large airlines as natural monopolies make sense? (5)

b.If the natural monopoly characterization is correct, predict the long run equilibrium in the airline industry?(5)

c.TFU and explain: If the airline industry is better approximated by a returns-to-scale industry then flights originating from large cities will be more profitable than flights originating from small cities because the larger population will result in fuller planes.(5)