considered 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 the Internet services per month, as well as the providers, marginal revenue (MR) curve, marginal cost (MC) curve, and average total cost (ATC) curve.True or false : under the average cost pricing policy, the Internet service provider has no incentive to cut cost.

PRICE (Dolars per subscriptle 8 8 ATO 8 8 MR 10 12 14 16 18 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 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