Antitrust laws are designed to maintain a competitive market environment by:

• A. eliminating all government oversight of business practices
• B. encouraging firms to merge and form monopolies
• C. preventing firms from engaging in practices that restrict competition
• D. setting prices for goods and services directly

Answer: (C)

Verified step by step guidance

1. Understand the purpose of antitrust laws: they are designed to promote competition and prevent monopolistic behaviors that harm consumers and the market.
2. Recognize that antitrust laws do not eliminate government oversight; rather, they involve government regulation to ensure fair competition.
3. Know that encouraging firms to merge and form monopolies contradicts the goal of antitrust laws, which aim to prevent monopolies.
4. Identify that setting prices for goods and services directly is typically not a function of antitrust laws but may be related to other regulatory policies.
5. Conclude that the correct role of antitrust laws is to prevent firms from engaging in practices that restrict competition, such as price-fixing, collusion, or creating barriers to entry.