Which of the following scenarios best illustrates a natural monopoly, and why does it fit this classification?

A natural monopoly occurs when a single company can supply a product or service to an entire market more efficiently than multiple companies could. This usually happens in industries where the cost of creating and maintaining infrastructure is very high, such as water supply or electricity distribution. For example, imagine a small town that needs a water system; it would be very expensive for multiple companies to build separate pipes and treatment plants. Instead, one company can build the system and serve everyone, keeping costs lower for everyone involved. This scenario fits the definition of a natural monopoly because it shows how one provider can effectively meet the needs of all consumers without the inefficiencies that competition would create.