In order for antitrust laws to raise social welfare, the government must:

• A. eliminate all forms of price discrimination in every market
• B. encourage the formation of monopolies to achieve economies of scale
• C. set prices above the competitive equilibrium to increase producer surplus
• D. promote competition and prevent firms from abusing market power

Answer: (D)

Verified step by step guidance

1. Understand the goal of antitrust laws: they aim to increase social welfare by promoting competition and preventing firms from abusing market power.
2. Recognize that eliminating all forms of price discrimination is not necessary for raising social welfare; some price discrimination can increase efficiency.
3. Note that encouraging monopolies contradicts the purpose of antitrust laws, as monopolies can reduce competition and harm social welfare.
4. Understand that setting prices above competitive equilibrium typically reduces consumer surplus and overall social welfare, so this is not a goal of antitrust laws.
5. Conclude that the correct approach is to promote competition and prevent firms from abusing market power, which helps achieve a more efficient allocation of resources and higher social welfare.