Final answer:
True, monopolies are sometimes encouraged to promote innovation and benefit consumers with better products. Examples include monopolies on new pharmaceuticals and utility services, which are allowed under U.S. antitrust laws as rewards for innovation or efficiency.
Step-by-step explanation:
The statement that there are a few important exceptions in which monopolies are actually encouraged to incentivize positive outcomes is true. Monopolistically competitive industries can benefit consumers by offering greater variety and incentives for improved products and services. However, this is sometimes debated because of concerns that a market-oriented economy might generate excessive variety.
Even though true monopolies are rare, we encounter them in various forms such as the U.S. Postal Service, electric companies, and garbage collection services. Pharmaceutical firms may also have monopolies on new drugs with no close substitutes available. These monopolies are permitted at times to encourage innovation or when they result from providing a superior product at a lower cost. Indeed, under U.S. antitrust laws, a monopoly is not illegal if it arises from such circumstances, with the law allowing for higher-than-normal profits for a time as a reward for innovation.