Question 40

This marketing plan is an example of price-fixing.

Setting a single non-negotiable commission rate for every seller illustrates price-fixing, as it involves collusion among brokers to maintain a consistent price point rather than allowing market forces to dictate competition.

A) apostle

The term "apostle" does not relate to pricing strategies or market regulations. It typically refers to a person who advocates for a particular cause or system, and thus is not applicable to the context of commission rates or pricing in brokerage.

B) price-fixing

Price-fixing accurately describes the situation where a small broker committee establishes a non-negotiable commission rate. This practice restricts competition by preventing sellers from negotiating different prices, which is a key characteristic of price-fixing.

C) market allocation

Market allocation involves agreements between competitors to divide markets among themselves, preventing competition in specific areas or segments. This option does not apply as the scenario focuses on commission rates rather than geographical or market segment division.

D) consumer protection

Consumer protection refers to laws and regulations that aim to safeguard buyers from unfair practices. While price-fixing can negatively impact consumers, the scenario presented specifically illustrates a pricing strategy rather than a protective measure for consumers.

Conclusion

The correct answer, price-fixing, directly addresses the scenario of a broker committee setting a non-negotiable commission rate, which restricts competition. Other options fail to depict the essence of the situation, as they either do not pertain to pricing strategies or misinterpret the nature of the agreements made by the brokers.