1. Under what conditions would rival firms have an incentive to merge into a monopoly or strong…

1. Under what conditions would rival firms have an incentive to merge into a monopoly or strong oligopoly when free entry into an industry exists?

2. Do the current owners of a monopolistic (or oligopolistic) firm reap from the firm's monopoly power? If you wanted to make money in the stock market, would you prefer to own the share of a monopolist (for example, AT&T or a local public utility)? Why or why not? Explain.

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