True or false: over time, the telephone company has a very strong incentive to lower costs when subject to average-cost pricing regulations.

The correct answer is:  True.

Explanation:

Technology rapidly advancing has led to mobile phones to be more sophisticated. Besides, as this technology is so common, mobile phones are more accessible in terms of prices. This is a big plus for telecommunication companies since lines are needed so that the cell phones can work. Not only adults use cell phones but it has a big market in teenagers. Being said this, there is no reason why telephone companies should not lower costs when the government implements regulations about average-cost pricing.

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