Texas Crammer Practice Exam

In the event of competitive salespersons reducing commission rates, what is one result of that behavior?

1. It benefits all involved agents

2. It fosters a cooperative relationship

3. It leads to an antitrust violation

4. It increases consumer trust

The correct answer is: It leads to an antitrust violation

When competitive salespersons reduce commission rates as a group, it can potentially lead to an antitrust violation. This scenario often falls under practices known as price-fixing, which is illegal under U.S. antitrust laws. These laws are designed to promote fair competition for the benefit of consumers and prevent practices that could lead to a monopoly or unfair control over a market. By collectively agreeing to lower commission rates, salespersons may be engaging in behavior that limits competition among themselves and can adversely affect consumers in the long run. Such arrangements can eliminate the incentive for healthy competition, leading to market distortions. Thus, the act of reducing commission rates collaboratively can trigger legal scrutiny and result in antitrust violations, emphasizing the importance of compliance with competitive practices in the marketplace.