What is the primary purpose of federal antitrust laws?

• A. To eliminate all forms of government regulation in markets
• B. To set price controls for all goods and services
• C. To promote competition and prevent monopolistic practices
• D. To subsidize large corporations to increase market share

Answer: (C)

Verified step by step guidance

1. Understand the role of federal antitrust laws in microeconomics, which is to regulate market competition rather than control prices or eliminate regulation entirely.
2. Recognize that antitrust laws are designed to prevent monopolies and promote competitive markets by prohibiting practices like price-fixing, collusion, and abuse of market power.
3. Identify that these laws aim to protect consumers and ensure efficient market outcomes by fostering competition among firms.
4. Note that antitrust laws do not involve setting price controls or subsidizing corporations; instead, they maintain a level playing field in the market.
5. Conclude that the primary purpose of federal antitrust laws is to promote competition and prevent monopolistic practices.