Which term describes a partnership where agents avoid competing for business by sharing markets?

The correct answer, market allocation, refers to an agreement between competing businesses to divide markets among themselves, which prevents competition in the designated areas. In this context, real estate agents, through a market allocation agreement, would agree to operate in different geographical areas or to serve different customer segments, thus avoiding competition in their respective markets.

This practice is significant because it can lead to a reduction in market competition, potentially harming consumers by limiting their choices and inhibiting fair pricing practices. By sharing markets, the agents could collaborate to ensure that they effectively cover their areas without undercutting each other's business, maintaining their respective market shares.

Understanding this concept is crucial in real estate and business contexts, as it helps professionals navigate legal and ethical boundaries in their practice.