CLEP Marketing Practice Exam 2026 – All-in-One Guide to Achieve Top Scores!

Price fixing is defined as the practice in which competing sellers come to an agreement to maintain prices at a certain level. This usually involves coordinating on price points to avoid competition, which can lead to higher prices for consumers. By agreeing on prices, sellers can effectively eliminate competition, creating a situation that resembles monopoly power in the market. This practice is illegal in many jurisdictions because it disrupts the natural forces of supply and demand, harming consumers by keeping prices artificially high.

The other options focus on different pricing strategies that do not involve coordination between competing sellers. For instance, setting prices below market value is a tactic that can attract customers but does not involve agreement with competitors. Similarly, reducing prices to increase sales volume is a competitive strategy aimed at boosting sales rather than manipulating market prices collectively. Offering discounts to selected customers is a promotional tactic that also lacks the collusion aspect present in price fixing. Therefore, the definition provided in the choice is the only one that accurately describes the collusive nature of price fixing.