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group boycotts are when two or more
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competitors conspire against another
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competitor by no longer doing business
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with them real estate professionals
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caught group boycotting can be fined
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millions of dollars and even put in jail
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hello everybody it's Zach here from Real
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Estate licensewizard.com today we're
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talking about group boycotts let's get
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started alright so let's take a look at
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that definition what is group boycotting
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well a group boycott is when two or more
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competitors agree to conspire against a
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third competitor by no longer working
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with them a group boycott increases the
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market power of the competitors who
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teamed up and harms the boycotted
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business now what is market power well
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when we're referring to Market power
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that's referring to the company's
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ability to control the price of its
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services with less competition in the
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market that business that is you know
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essentially boycotting the other one can
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raise their prices to any amount and
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consumers would then have no choice but
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to pay now let's bring this into real
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estate what are some examples of group
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boycott in real estate well one example
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is if real estate agents Henry and Sally
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stopped doing business with real estate
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agent Dan driving him out of the market
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then once there is less competition
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Henry and Sally raised the cost of their
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services this would be considered an
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illegal group boycott and price fixing
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another example of a group boycott is if
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a group of real estate dealers agree not
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to support a particular Advertiser thus
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forcing them to lower their rates so
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there's a bunch of different examples
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but essentially they all are the same
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thing it's a group of people you know
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group of business professionals real
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estate professionals actively not doing
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business with a certain business forcing
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them to you know essentially go out of
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business and then you know raising their
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prices themselves so you might be
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sitting there wondering well what's the
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problem with eliminating the competition
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and watching your Market power grow well
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a group boycott in real estate
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interferes with the free market which is
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necessary for keeping prices for houses
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and services fair and reasonable a
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boycott allow a group of competitors to
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engage in price fixing which is when
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they all agree to set the cost of their
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services to a specific price this means
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that home buyers renters will have to
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pay these prices no matter how high they
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are as other competitors have been
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forced out of the market not only is
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this type of business practice immoral
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but it violates Federal antitrust laws
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so what are antitrust laws we touched
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upon them a little bit in the last video
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but essentially Anti-Trust laws are
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federal and state government laws
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regulating business corporations of
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conduct and organization these laws aim
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to promote Fair competition and ensure a
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free market for consumers there's three
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ones that you need to know for the real
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estate exam one the Sherman Antitrust
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Act to The Clayton Act and three the
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Federal Trade Commission act so what do
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you need to know for the real estate
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exam well being an expert on group
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boycotting will help you pass your exam
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and succeed as a future real estate
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agent as long as you're up to date on
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antitrust laws and violations you should
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have nothing to worry about coming exam
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day it's important to note before the
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test that group boycotts are illegal and
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real estate professionals should promote
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a fair and honest free market instead of
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engaging in anti-competitive tactics now
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that you're an expert on this click the
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video here for more and click here to
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subscribe thank you so much for watching
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I'll see you guys next time bye
