Question

why are utilities, such as electricity and water, examples of natural monopolies? the cost of production restricts competition in the market. there are limited natural resources to meet demand. consumers only trust known companies to provide these essentials. there is no need for alternative options.

Explanation:

Natural monopolies occur when economies of scale are so large that one firm can produce the entire output of the market at a lower cost than multiple firms. For utilities like electricity and water, the high fixed - costs of infrastructure (power plants, water treatment facilities, and distribution networks) mean that it is more efficient for one firm to serve the market. New entrants face high production costs, which restricts competition.

Answer:

The cost of production restricts competition in the market.