Water is often provided to households by one supplier because:

Question

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Water supply is often considered a natural monopoly because the cost of providing water infrastructure is so high that it is not efficient to have multiple firms competing for customers. A single supplier can produce at the lowest cost and provide water to more households than two or more smaller firms could. Additionally, there is often only one set of water pipes and treatment plants in a given area, making it difficult for multiple firms to provide separate services.

Water Is Often Provided to Households by One Supplier Because