No municipal is a monopoly until you get to the national level (then you run into difficulties with Imports/Exports and immigration/emigration). Just ask Detroit. The businesses changed, Detroit failed to adapt, so the residents moved elsewhere (and took their tax revenue with them), now the city struggles to give property away. Or look at the fight that happened between cities over Amazon's "HQ2".private Enterprise must innovate or they die, on the other hand municipal services can quite literally make themselves a monopoly.
Municipalities are constantly competing with each other for residents and business.