Antitrust policy is designed to:

• A. eliminate all forms of government intervention in the economy
• B. promote competition and prevent monopolistic practices
• C. set prices for all goods and services in the market
• D. encourage the formation of monopolies to increase efficiency

Answer: (B)

Verified step by step guidance

1. Understand the purpose of antitrust policy in microeconomics, which is primarily concerned with maintaining competitive markets.
2. Recognize that antitrust policies aim to prevent monopolistic practices that can harm consumers by reducing competition and leading to higher prices or lower quality.
3. Eliminate options that do not align with this goal, such as eliminating all government intervention or encouraging monopolies, since these contradict the idea of promoting competition.
4. Identify that setting prices for all goods and services is typically not a function of antitrust policy but rather of regulatory bodies or market forces.
5. Conclude that the correct role of antitrust policy is to promote competition and prevent monopolistic practices, ensuring markets function efficiently and fairly.