Many public utilities are permitted to operate as monopolies because they enjoy economies of large-scale production.

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Public utilities such as electric, gas, and water companies often require large investments in infrastructure, which results in high fixed costs. These fixed costs can be spread over a larger customer base, resulting in lower per-unit costs for each customer. This is known as economies of scale and makes it more efficient for a single company to provide the service rather than having multiple smaller companies competing for the same market. As a result, public utilities are often permitted to operate as monopolies under strict regulation by government agencies to ensure fair pricing and service quality.

Many Public Utilities Are Permitted to Operate as Monopolies Because