Why does our government enforce antitrust legislation?
A) because monopolies are known to be unfair to their stockholders
B) because monopolies are known to be unfair to their employees
C) because the government wants to create competition in markets in the interests of promoting efficiency
D) because the government wants to create competition in markets in the interests of promoting an equal distribution of income

Question

Quizplus · Accepted Answer

The government enforces antitrust legislation to create competition in markets. This promotes efficiency because when companies have to compete, they are encouraged to innovate, improve quality, and lower prices. This benefits consumers as well as other companies who might be shut out of the market by a dominant player.

Answer: D
 While promoting efficiency is a major reason for antitrust legislation, promoting an equal distribution of income is not the main driver. However, some would argue that breaking up monopolies can reduce income inequality by opening up markets to more competitors, which can lead to more widespread economic growth and job opportunities.

Why Does Our Government Enforce Antitrust Legislation