Real Estate Council of Alberta Fundamentals Practice Exam

What principle is part of the Competition Act?

1. Collusion with competitors is encouraged.

2. Discrimination against competitors is required.

3. Misleading the public through advertising is permitted.

4. Do not collude with competitors.

The correct answer is: Do not collude with competitors.

The principle that encourages not colluding with competitors aligns with the core intent of the Competition Act, which is designed to promote fair competition in the marketplace. This Act aims to prevent anti-competitive practices that can harm consumers and other businesses. Collusion can lead to price-fixing, market division, or other arrangements that restrict competition and disadvantage consumers by reducing choices and inflating prices. By prohibiting collusion, the Competition Act seeks to maintain a competitive environment where businesses can compete fairly based on the quality of their products or services, prices, and other factors. This not only benefits consumers by promoting better options and fair prices but also fosters innovation and efficiency in the marketplace. The other choices contradict the principles of the Competition Act. Encouraging collusion, requiring discrimination against competitors, and permitting misleading advertising all undermine competitive practices and consumer protection, which are fundamental goals of the legislation.