National Real Estate Exam (PSI)Practice of Real EstateMedium
Two competing brokers agree that Broker A will only work in the north side of town and Broker B will only work in the south side, so they no longer compete for the same listings. This is an antitrust violation known as:
- AMarket allocation
- BPrice fixing
- CTying arrangement
- DSteering
Show answer & explanationAnswer & explanation
Correct answer: A. Market allocation
Market allocation is an illegal agreement between competitors to divide territories or customer types to avoid competing with each other, violating antitrust laws.
Why the other options are wrong
- B. Price fixing involves agreeing on fees, not dividing geography.
- C. Tying involves forcing a customer to purchase bundled services.
- D. Steering is a fair housing violation involving directing buyers by protected class, not a competitor agreement.
Market Allocation
An antitrust violation where competitors agree to divide markets, territories, or customers to reduce competition.
- Violates Sherman Antitrust Act
- Distinct from steering (fair housing) despite similar sound
- Can involve geographic or customer-type division
Memory trick: Market allocation = drawing lines on a map to avoid competing