a. natural monopoly
A common example of a natural monopoly is electricity service. To provide it, workers must build power stations and power lines. The company must connect each customer's home or business to the system of lines and stations. The costs are very high. If more than one company offered electrical service to an area, that means more power stations and lines that would cross each other. It is more efficient, safer, and less costly to allow one company to control the electricity service to an area. With more customers on the same power grid, or system of electricity flow and equipment, the costs are spread out more and so prices are lower.
