Difficulty: Hard

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During a broker meeting, a broker states that a competitor is NOT charging enough commission. The other brokers should

Rationale

Remove themselves from the meeting.

If a broker believes that a competitor's commission is too low, the appropriate response for the other brokers is to exit the meeting. This action avoids any potential violation of antitrust laws, which could arise from discussing or colluding on commission rates.

A (vote on a new fee.) YOUR ANSWER

Voting on a new fee implies a collective agreement among brokers, which could easily be perceived as price-fixing. Such actions are illegal under antitrust regulations, making this choice not only inappropriate but also potentially damaging to the brokers involved.

B (reduce their fees.) YOUR ANSWER

Choosing to reduce their fees in response to the competitor's lower commission could be interpreted as an attempt to undercut competition. This behavior can lead to a price war, which is often detrimental to the industry as a whole, and may also raise legal concerns regarding anti-competitive practices.

C (remove themselves from the meeting.) CORRECT

Exiting the meeting is the safest course of action for the brokers. It eliminates the risk of any discussions that could lead to illegal collusion on pricing strategies. By removing themselves, they maintain compliance with antitrust laws and avoid any appearance of wrongdoing.

D (not show the competitor's listing.) YOUR ANSWER

Refusing to show a competitor's listing could be seen as an attempt to harm the competitor's business, which may lead to accusations of anti-competitive behavior. This choice does not address the issue of commission rates and could result in negative repercussions for the brokers involved.

Conclusion

In situations where a broker mentions a competitor's commission rates, the most prudent action for the other brokers is to exit the meeting. This decision protects against potential legal issues related to collusion and ensures that they remain compliant with antitrust laws. All other options either risk legal ramifications or do not adequately address the situation at hand.

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