This makes electricity unlike the production of other goods, and the provision of electricity to customers in a particular region or area, such as Jersey Central Power and Light in the New Jersey area, different from, for example, a manufacturing company that produces shoes, which can alter its production rates within certain limits depending on demand or the cost of input goods such as wages and fabric, or a franchise providing cleaning services, which must continually replenish its stock of start-up goods such as cleansers, and allow for the depreciation costs of its vacuums and scrub brushes

            

             Thus, electricity is a classic example of a natural monopoly. "Once the gargantuan fixed costs involved with power generation and power lines" are paid "each additional unit of electricity costs very little" and thus "the more units sold, the more the fixed costs can be spread, creating a reasonable price for the consumer.4 Having two electric companies to compete against one another, or many small electricity companies that users could chose from would split electricity production. Then, each company would have to have its own power source and power lines. This would lead to a near doubling of price, as initial input costs are so high. 5.

             Clearly, competition, despite is proud position in the American capitalist market economy, is not always the answer to such dilemmas, when, as with the electricity industry, the good or services long run marginal cost is completely horizontal on a graph of industry supply and demand, but the long run average cost of the good or service being produced is downward- sloping.6 .

             The dilemma of how to cope with the need for such an economic situation in the electrical industry is that the output where the marginal cost of the goods and services being provided are equal to the price. They are still the most efficient output, despite the expense of the original outlay, and the low cost of selling the good cannot cover the total costs of the good or service.