Think about your local water company. Why is there only one water company providing water services in your community instead of having multiple water companies from which to choose for your service?

Check the answer below.

Step-by-step explanation

This is because it's more efficient economically to provide the water under one company than having multiple companies doing the same.  Water is a necessity and therefore the demand is always high and therefore it has to be produced on a large scale always. Therefore, having a single company leads to fewer costs, making it efficient, unlike many companies. Additionally, it's more profitable to have one large company than many Small ones due to the high costs involved and the high demand that may overwhelm the small-scale water producers. Furthermore, the returns are massive because information and decision-making are centralized; hence, its running becomes more comfortable. This is an example of a natural monopoly