why are utilities, such as electricity and water, examples of natural monopolies?\nthe cost of production…
why are utilities, such as electricity and water, examples of natural monopolies?\nthe cost of production restricts competition in the market.\nthere are limited natural resources to meet demand.\nconsumers only trust known companies to provide these essentials.\nthere is no need for alternative options.
Answer
Brief Explanations:
Natural monopolies occur when high fixed - costs or economies of scale make it inefficient to have multiple producers. For utilities like electricity and water, the cost of building infrastructure (e.g., power plants, water treatment facilities, and distribution networks) is extremely high. This high cost of production restricts competition as it is difficult for new firms to enter the market and compete with existing providers.
Answer:
The cost of production restricts competition in the market.