Final answer:
A single provider of electricity or natural gas in a town or city is likely a regulated natural monopoly, due to the high efficiency and cost effectiveness of having one provider rather than multiple competing firms.
Step-by-step explanation:
If you live in a town or city that has a single provider of electricity or natural gas, that natural monopoly provider is most likely a regulated, natural monopoly. Public utilities, such as those providing water and electrical service, are prime examples of a natural monopoly. This occurs where the market demand intersects with the downward-sloping portion of the average cost curve, meaning that one firm can serve the whole market more efficiently than several firms due to high fixed costs and low variable costs. The existence of a natural monopoly poses challenges for competition policy, as dividing such utilities into smaller companies would lead to increased costs and duplicated capital investments, inherently making competition both unlikely and costly.