To stimulate competition and protect both consumers and workers, the federal government:
A) places heavy taxes on firms in monopolistic competition.
B) places limits on international trade in order to stimulate domestic production.
C) creates regulations to intervene in the free market.
D) creates business systems to meet the needs of all consumers.

Question

Quizplus · Accepted Answer

The federal government intervenes in the free market by creating regulations to protect consumers and workers and to stimulate competition. This helps to prevent monopolies from forming and creating a lack of competition in the market, which can result in higher prices and lower quality products or services. Heavy taxes on firms in monopolistic competition may not be effective in stimulating competition, and limits on international trade may not necessarily protect consumers and workers. The creation of business systems to meet the needs of all consumers is not something that the federal government typically does.

To Stimulate Competition and Protect Both Consumers and Workers, the Federal