Which demonstrates one way the government can promote competition?

Which demonstrates one way the government can promote competition?

• A. Enacting and enforcing antitrust legislation
• B. Reducing the number of regulatory agencies
• C. Encouraging monopolies
• D. Raising tariffs

Answer: (A)

Promoting competition comes from restricting anti-competitive behavior and ensuring fair rivalry. Enacting and enforcing antitrust legislation does exactly that: it prohibits monopolies, cartels, and mergers that unfairly reduce choice. When these laws are applied, new firms can enter markets, prices tend to be lower, and innovation can flourish because firms must compete for customers. The other options would less likely promote competition: fewer regulatory agencies can reduce oversight and enforcement, making it easier for large firms to dominate; encouraging monopolies directly reduces competition; raising tariffs can shield domestic producers but usually limits foreign competition and can raise prices for consumers, which harms competition overall.

Promoting competition comes from restricting anti-competitive behavior and ensuring fair rivalry. Enacting and enforcing antitrust legislation does exactly that: it prohibits monopolies, cartels, and mergers that unfairly reduce choice. When these laws are applied, new firms can enter markets, prices tend to be lower, and innovation can flourish because firms must compete for customers. The other options would less likely promote competition: fewer regulatory agencies can reduce oversight and enforcement, making it easier for large firms to dominate; encouraging monopolies directly reduces competition; raising tariffs can shield domestic producers but usually limits foreign competition and can raise prices for consumers, which harms competition overall.