In a natural monopoly, why is it often more efficient for a single firm to serve the entire market rather than multiple firms?

A natural monopoly occurs when a single company can supply a product or service to an entire market more efficiently than multiple competing companies. This often happens because of high fixed costs, like building infrastructure, which makes it expensive for more than one firm to operate. For example, think of a water supply system; it would be wasteful and costly to have several companies digging up streets to lay down pipes. When one firm serves the whole market, it can spread those high costs over many customers, lowering prices and improving service. Therefore, in many cases, a single firm can provide better value to consumers than if several firms tried to compete.