Encouraging the formation of monopolies provides firms an incentive to ________.

Question

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Encouraging the formation of monopolies provides firms an incentive to innovate by allowing them to earn higher profits through exclusive control over the market. This incentive to innovate can lead to the development of new products or services and the improvement of existing ones, thereby promoting economic growth and development. Increasing social surplus, decreasing deadweight loss, and hiring fewer resources in production are not necessarily incentives for firms to form monopolies.

Encouraging the Formation of Monopolies Provides Firms an Incentive to ________