What is the incentive for continuing to mine bitcoin as we get very close to the 21 million cap?
When that runs out, the system can support transaction fees if needed. 

Satoshi Nakamoto

The fact that the subsidy (newly minted bitcoins) decreases does not mean that the overall reward that miners receive decreases too: they also collect the fee of all transactions they verify and these tend to increase with the use of the bitcoin network.
Furthermore the value of the reward, measured in fiat terms, has compensated the decrease in bitcoins received with the increase in their price (at least so far).

Follow-up question: Couldn't this lead to a monopoly situation where
fringe miners give up entirely and only the biggest mining networks
reap the profits of continuing to mine Bitcoin?

For what we have seen so far, fringe miners are those have high electricity costs or use inefficient hardware, these factors affect more the sustainability of business than the scale of the farms.
It will be always possible run small farms or even a single miner (maybe using an old and cheap asic) if you have near zero energy costs.