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Question 12 (1 point) This graph shows the demand for cable TV services in a town of 50,000 households. The local government
e 1: MONTHLY PRICE (Dollars) Page 2: Page 3: 0 5 10 15 20 25 30 35 40 45 50 MONTHLY CABLE TV SUBSCRIPTIONS (Thousands of Page
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Answer #1

The average total cost is very high initially but it continues to fall as more and more subscriptions are sold. This indicates that there is a huge fixed cost and a very minimal per unit cost. Declining average total cost signifies economics of scale which are a feature of natural monopoly. The statement is true

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