The government often allows only one company to supply electricity in a given geographic area because allowing several companies to do so would result in an inefficient duplication of infrastructure. This suggests that electric utilities are _____.

Question

Quizplus · Accepted Answer

The fact that only one company is allowed to supply electricity in a geographic area suggests that the industry is a natural monopoly, where it is more efficient and cost-effective for one company to provide the service due to the high fixed costs of infrastructure.

The Government Often Allows Only One Company to Supply Electricity