It is not efficient at all to move the whole fire department over to a house just to watch it burn and make sure it doesn't spread to neighbors.
Why is it not efficient? As long as they don't have to wear much equipment, nor spend much of the chemicals, nor risk lives and limb, the costs of such a move are negligible.
It's also a natural monopoly.
There is no such thing. "Natural monopoly" is a myth created by statists already in government to justify their control of our lives.
It wouldn't be efficient to have two competing fire departments in a small town.
Who said, they must limit themselves to one town? They don't — not any more than KFC does. On the contrary, the current situation, where each little town has its own department is inefficient. Multiple such companies could open shop in multiple places — competing with each other across town- and state-borders.
It's much better to have a larger one with better equipment.
Sure. But it does not have to be government-owned.