In 2010 and 2011, the U.S. government gave incentives to new businesses. A new firm could write off $10,000 in start-up costs, they could write off new capital investment, investors who invested in start-ups and small businesses would be exempt from capital gains tax if they sold their stakes for a profit, and the Small Business Administration increased the size of loans it would guarantee to $5 million. What effect would these incentives have on monopolistically competitive markets? Explain.
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