SSC MTS EXAM

Detailed explanation-1: -The case of tap water can be an example of a natural monopoly. It makes sense to have only one company providing a network of water pipes and sewers because the setting up of a national network of pipes and sewage systems entails very high capital costs.

Detailed explanation-2: -An example of a natural monopoly is tap water. It makes sense to have just one company providing a network of water pipes and sewers because there are very high capital costs involved in setting up a national network of pipes and sewage systems.

Detailed explanation-3: -To date, the most famous United States monopolies, known largely for their historical significance, are Andrew Carnegie’s Steel Company (now U.S. Steel), John D. Rockefeller’s Standard Oil Company, and the American Tobacco Company.

Detailed explanation-4: -Utilities such as water and electricity are examples of natural monopolies because the production cost restricts competition in the market. Electricity production is a capital-intensive operation that can edge out potential firms due to the associated costs.