Two brokerages agree that one will solicit business only on the north side of town and the other only on the south side. This is:

a lawful marketing plan judged under the rule of reason

Exam vocabulary · antitrust violation

What Is Market Allocation in Real Estate?

Definition

Market allocation is an antitrust violation in which competing brokerages agree to divide up territories, property types or classes of customer so that they stop competing. Each firm gets a protected patch of the market, and the agreement is illegal whether the division is drawn geographically or by category of client.

How the exam tests market allocation

These mirror the phrasing you will see on test day. Answer them, then read the explanation whether or not you got it right.

Market Allocation: exam questions1/3

Practice of real estate

Two brokerages agree that one will serve only the north side of the city and the other only the south. This violation is called:

score 0/0

Every market allocation question, answered

Every question above with its correct answer and the reasoning behind it. Read the explanations for the ones you answered correctly too. A lucky guess and knowing the rule look identical on a score report. These are sample questions from our larger bank.

1. Two brokerages agree that one will serve only the north side of the city and the other only the south. This violation is called:
- AMarket allocationcorrect
- BBlockbusting
- CRedlining
- DSteering
Why: Dividing territory between competitors is market allocation, a per se Sherman Act violation. Note the trap: steering, blockbusting and redlining are fair housing violations, not antitrust ones.
Practice of real estate
2. Which of the following is NOT one of the four antitrust violations most tested on the licensing exam?
- AGroup boycott
- BPuffingcorrect
- CPrice fixing
- DMarket allocation
Why: The four are price fixing, market allocation, group boycott and tie-in arrangements. Puffing is exaggerated sales talk — a misrepresentation issue, not an antitrust one.
Practice of real estate
3. Two brokerages agree that one will solicit business only on the north side of town and the other only on the south side. This is:
- Aa tie-in arrangement
- Bmarket allocationcorrect
- Ca group boycott
- Da lawful marketing plan judged under the rule of reason
Why: Dividing territory between competitors is market allocation, and it is condemned without inquiry into its effects. Calling it a marketing plan does not help, because the customers in each territory lost the choice competition would have given them.
Practice of real estate

Where market allocation sits in the exam vocabulary

Market Allocation is a antitrust violation, and so are price fixing, group boycott and tie-in arrangement. That matters more than it sounds: a multiple-choice item builds its wrong answers out of siblings like these, because they are the options that look plausible to someone who has learned the category but not the distinction. If market allocation appears as the correct answer, expect to see price fixing and group boycott on the same screen.

Market Allocation does not stand on its own: it assumes you already know sherman antitrust act. Questions that look like they are testing market allocation are often really testing whether that idea is solid underneath it.

The exam most often tries to catch you by putting market allocation next to price fixing and group boycott. Each of those is a real concept sitting close enough to be tempting, and the question usually turns on the single feature that separates them rather than on the definition of either one. Read the contrast, not the term.

Related exam terms

Tested alongside

Often confused with

Know this first

Market Allocation belongs to the antitrust violation family of exam concepts. When it is solid, take the free real estate exam prep or browse the full real estate exam vocabulary.