Question of the Day: Day Fourteen

We'll continue working with the Louisville market for cable television and assume that Insight Communications is a monopolist in the provision of regular cable service. Assume also that Insight's demand curve is linear (again), that there is only one price set for cable, and that the MC and AC curves of Insight are horizontal lines.

Is the Louisville market "better off" with this monopoly providing cable, or would the market (as a whole) be better off if this market were perfectly competitive? Explain your answer by discussing how the various areas of "surplus" (on a graph of this particular market) would be affected by such a change.