What illegal practice involves brokers agreeing to only work with clients near their own offices?

What illegal practice involves brokers agreeing to only work with clients near their own offices?

• A. Price fixing
• B. Market allocation
• C. Group boycott
• D. Redlining

Answer: (B)

Market allocation is the illegal practice where brokers or agents agree to divide markets among themselves, typically by geographic area or client type. In the scenario described, brokers are coordinating to only work with clients near their own offices, effectively limiting competition and client options in certain geographic regions. This behavior restricts the flow of business to only those brokers or agents in the agreed-upon areas, which can lead to a less competitive market and potentially higher prices for consumers. By segmenting the market, the brokers protect their own interests at the expense of consumer choice and fair market practices. This collusive behavior is a violation of antitrust laws designed to promote competition and protect consumers.

Market allocation is the illegal practice where brokers or agents agree to divide markets among themselves, typically by geographic area or client type. In the scenario described, brokers are coordinating to only work with clients near their own offices, effectively limiting competition and client options in certain geographic regions. This behavior restricts the flow of business to only those brokers or agents in the agreed-upon areas, which can lead to a less competitive market and potentially higher prices for consumers. By segmenting the market, the brokers protect their own interests at the expense of consumer choice and fair market practices. This collusive behavior is a violation of antitrust laws designed to promote competition and protect consumers.