Final answer:
Competition has been introduced in the electric system primarily in the generation and retail sectors, allowing consumers to choose among different electricity providers. This shift toward competitive markets arose with changes in technology and deregulation, despite the traditional role of utilities as natural monopolies due to high infrastructure costs.
Step-by-step explanation:
In the context of public utilities and natural monopolies, competition has been traditionally limited, particularly for services such as water and electricity delivery. This is due to the high infrastructure costs associated with these utilities, like laying down multiple sets of pipes or electrical wires, which are economically inefficient. However, changes in technology and policies have introduced competition in parts of these sectors.
For instance, while historically only AT&T was legally allowed to provide phone services, advancements in technology, such as the shift from wires to microwave and satellite transmissions, have allowed for competition in the telecommunications industry. Similarly, although traditionally a single company would manage the electrical grid due to the economies of scale, there has been a move towards deregulation and introducing competition within the generation and retail sectors of electricity. Customers now often have a choice of electricity providers, though the transmission and distribution networks remain natural monopolies.
Moreover, in historic battles such as the War of the Currents between Edison's DC system and Westinghouse's AC system, competition ultimately determined the primary method of electrical distribution, demonstrating how competition can occur within technological advancements in electric systems.