Which of the following is a mechanism through which the government can regulate competition?

The implementation of the Competition Act 1998 serves as a key mechanism for the government to regulate competition within the marketplace. This legislation was designed to promote fair competition and prevent anti-competitive behavior among businesses. It sets out rules against practices such as monopolies, cartels, and other forms of market manipulation that can harm consumers and stifle competition.

By enforcing this Act, the government can investigate and take action against businesses that engage in unfair practices, ensuring a level playing field for all competitors. This regulatory framework helps to foster an environment where innovation can thrive, prices remain fair, and consumers have a wider choice of products and services.

The other options would not effectively support fair market competition. For instance, offering tax breaks to monopolistic companies could entrench their dominance rather than promote a competitive market. Promoting large-scale mergers without scrutiny may lead to increased market concentration, reducing competition. Encouraging companies to collude would violate competition laws and undermine fair market competition, negatively impacting consumers and other businesses.