Affiliate Broker Tennessee (TN PSI) National Practice Exam `

Which of the following is NOT considered a group boycott?

1. Collaborating with suppliers for a discount.

2. Refusing business with non-members.

3. Agreeing on commission splits among brokers.

4. Coordinating to limit competition in a market.

The correct answer is: Collaborating with suppliers for a discount.

A group boycott occurs when members of a group agree not to conduct business with a particular individual or company to exert pressure for some change in practices or policies. This is typically considered anti-competitive behavior and can lead to legal ramifications. Collaborating with suppliers for a discount does not fall under this definition of a group boycott. It is a business practice where members may work together to negotiate better terms, which can be a legitimate competitive strategy aimed at reducing costs and enhancing profitability. This collaboration does not involve refusing to do business with specific companies or individuals outside of the agreed terms and is generally accepted in the realm of business operations. In contrast, the other options involve practices that actively restrict competition or business opportunities for certain parties. Refusing business with non-members directly relates to excluding individuals from a market based on their membership status, while agreeing on commission splits among brokers can limit what they can offer to clients. Coordinating to limit competition in a market clearly represents anti-competitive conduct and is a typical example of a group boycott. Thus, collaborating with suppliers for a discount stands apart from the other scenarios by not involving any aspect of refusal to deal with others or limiting competition; rather, it encompasses strategic partnership behavior.