3 . Natural monopoly analysis The following graph gives the demand (D) curve for water services in the fictional town of Streamship Springs. The graph also shows the marginal revenue (MR) curve, the marginal cost (MC) curve, and the average total cost (ATC) curve for the local water company, a natural monopolist. On the following graph, use the black point (plus symbol) to lndlcate the prot- maxlmlzlng prlce and quantlty for this natural monopolist. 40 --l- as - ' 32 . Monopoly Oulcome 28 ' 24 ' 20 ' 1G 12 - ATC 0 1 2 3 4 5 G 'l' B Q 10 QUANTITY {Hundreds of cubic feel] PRICE [Dollars per hundred whit: feat} Which of the following statements are true about this natural monopoly? Check all that apply. It is more efficient on the cost side for one producer to exist in this market rather than a large number of producers. The water company is experiencing economies of scale. In order for a monopoly to exist in this case, the government must have intervened and created it. The water company must own a scarce resource. True or False: Without government regulation, natural monopolies always earn zero profit in the long run. True False