Government helps firms create monopolies

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There are examples in the market in which the government helps firms create monopolies. Why would they do this?

1. They only do this for Crown corporations to raise the governments revenue base

2. the government wants the firm to produce and the firm will only produce if there is a monopoly.

3. the firm that is granted a monopoly has an extraordinarily high average total cost.

4. Both 2 and 3 are true.

Reference no: EM131405271

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