What is the primary function of a regulator in the economy?

• A. To produce goods and services
• B. To preserve marketplace competition
• C. To set prices for all products
• D. To mandate consumer preferences

Answer: (B)

The primary function of a regulator in the economy is to preserve marketplace competition. Regulators play a crucial role in ensuring that competition remains healthy within various industries. By monitoring and enforcing laws and guidelines, regulators prevent monopolies and collusion among businesses that can lead to anti-competitive practices.

Healthy competition is essential for a free enterprise system because it encourages innovation, improves product quality, and keeps prices in check. When companies compete, they strive to meet consumer demands more effectively, which can lead to a wider variety of choices and better services for consumers.

In contrast, producing goods and services is typically the role of private businesses rather than regulators. Setting prices for all products does not fall within the purview of regulators in a free market economy, which relies on the forces of supply and demand. Mandating consumer preferences also goes against the principles of a free market, where consumers have the autonomy to make their own decisions based on personal needs and wants.