Final answer:
To promote competition, the government enacts and enforces antitrust legislation, which helps maintain a competitive market environment by preventing restrictive practices, controlling monopolies, and discouraging anti-competitive mergers.
Step-by-step explanation:
The government can promote competition by enacting and enforcing antitrust legislation. This type of legislation is designed to prevent anti-competitive mergers and acquisitions, end restrictive practices, and impose regulation on natural monopolies. By mitigating these competition-stifling practices, antitrust laws ensure a more dynamic and competitive marketplace, allowing for a greater degree of competition and thereby promoting economic efficiency and consumer welfare.
On the other hand, implementing protectionist measures such as a tariff on foreign products can discourage competition by shielding domestic industries from international competitors. Such policies may offer short-term relief to domestic markets but can lead to inefficiency and reduced consumer welfare in the long run.