What is the effect of government intervention in a competitive marketplace?

Government intervention in a competitive marketplace is designed to ensure fair practices and competition, which is why this choice is the correct answer. Regulations and policies implemented by the government can help prevent monopolistic behaviors, protect consumers from fraud, promote fair competition, and address market failures. For instance, antitrust laws are put in place to prevent larger companies from engaging in unfair practices that would harm smaller competitors, thus allowing for a more balanced playing field.

When the government actively participates in regulating the marketplace, it can foster an environment where multiple businesses can compete effectively, ensuring that consumers have choices and that prices remain fair. This intervention can also help to create standards that protect public interests, such as quality and safety standards for products.

In contrast, other choices indicate scenarios that do not accurately represent the role of government in maintaining competition. For example, stating that government intervention completely removes competition would misrepresent its purpose, as intervention is aimed at preserving and enhancing competition rather than eliminating it. Similarly, the notion that it promotes monopolies contradicts the goals of antitrust laws, and claiming there is no significant impact on the market overlooks the crucial role that regulations play in shaping competitive dynamics.