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Suppose a war breaks out and there Is a need to expand capacity in an Industry of strategic importance. The industry is currently a monopoly.
Suppose a war breaks out and there Is a need to expand capacity in an Industry of strategic importance. The industry is currently a monopoly. With reference to relevant concepts and literature, discuss whether the government should encourage new firms to supply the additional capacity or whether the existing monopolist should be subsidised. Clearly justify your conclusions
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