Which of the following best describes the role of the U.S. government with respect to market competition?

• A. The government prohibits all forms of advertising to reduce competition.
• B. The government enforces antitrust laws to prevent monopolies and promote competition.
• C. The government sets all prices in the market to ensure fairness.
• D. The government eliminates all barriers to entry for every industry.

Answer: (B)

Verified step by step guidance

1. Understand the role of government in market competition, which typically involves regulating to ensure fair competition rather than controlling all aspects of the market.
2. Recognize that prohibiting all advertising would reduce competition by limiting information available to consumers, which is generally not a government policy.
3. Know that setting all prices in the market is a form of price control, which is not the usual role of the U.S. government in competitive markets.
4. Identify that eliminating all barriers to entry is unrealistic because some barriers (like high startup costs or regulations) naturally exist; the government may reduce unfair barriers but not eliminate all.
5. Conclude that the government enforces antitrust laws to prevent monopolies and promote competition, which aligns with the role of maintaining a competitive market environment.