Question 20

This marketing plan is an example of price-fixing.

The committee's decision to set a uniform, non-negotiable commission rate for all sellers represents price-fixing, as it standardizes prices across the market, potentially limiting competition and consumer choice.

A) apostille

Apostille refers to a form of certification for documents that is used in international law. It has no relevance to the context of pricing or commission rates in real estate, making this option incorrect.

B) price-fixing

Price-fixing occurs when sellers collude to set prices at a certain level, removing competition from the pricing equation. In this case, the broker committee's uniform commission rate for all sellers exemplifies price-fixing as it restricts negotiation and ensures a fixed cost for consumers.

C) market allocation

Market allocation involves dividing markets among competitors, which allows each to operate in a designated area or with specific customers. This option is incorrect because the committee's action does not involve dividing the market but rather imposing a uniform pricing strategy.

D) consumer protection

While the intention behind the commission plan may be to provide transparency to consumers, consumer protection typically involves regulations that safeguard consumer rights and interests. This option is incorrect as the plan does not inherently protect consumers but rather limits their ability to negotiate.

Conclusion

Price-fixing is the correct answer as it accurately describes the committee's strategy of implementing a fixed commission rate for all sellers, thereby limiting price competition. The other options do not align with the nature of the marketing plan, which focuses on standardizing prices rather than protecting consumers or dividing markets.