[and] to protect consumers from abusive financial services practices. . .

All market-based economies operate against a background of laws and regulations, including laws about

enforcing contracts, collecting taxes, and protecting health and the environment. The government policies that

we discussed in this chapter—like blocking certain anticompetitive mergers, ending restrictive practices,
imposing price cap regulation on natural monopolies, and deregulation—demonstrate the role of government

to strengthen the incentives that come with a greater degree of competition.

BRING IT HOME

More than Cooking, Heating, and Cooling
What did the Federal Trade Commission (FTC) decide on the Kinder Morgan / El Paso Corporation merger? After

careful examination, federal officials decided there was only one area of significant overlap that might provide the

merged firm with strong market power. The FTC approved the merger, provided Kinder Morgan divest itself of the
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