9. Regulating a natural monopoly Consider the only Internet service provider in a small town, which you can assume operates as a natural monopoly. The following graph shows the demand curve for internet services per month, as well as the provider's marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve. 100 PRICE (Dollars per subscription] ATO MR 12 14 18 15 20 QUANTITY (Thousands of subscriptions] Suppose the government has elected not to impose regulations on the industry, and so the firm faces no regulatory constraints in maximizing profits.Complete the first row of the following table. Short Run Quantity Price Pricing Mechanism (Subscriptions) ( Dollars per subscription) Profit Long-Run Decision Profit Maximization Marginal-Cost Pricing Average-Cost Pricing Suppose now that the government decides to require the monopolist to set its price equal to marginal cost. Complete the second row of the previous table. Suppose now that the government decides to require the monopolist to set its price equal to average total cost. Complete the third row of the previous table. True or False: Under the average-cost pricing policy, the internet service provider has no Incentive to cut costs. Q True () False