Massachusetts Real Estate License Practice Test

What is the purpose of the Sherman Antitrust Act?

1. To regulate prices of goods

2. To encourage free and open competition

3. To protect consumers from fraud

4. To license real estate agents

The correct answer is: To encourage free and open competition

The Sherman Antitrust Act was enacted in 1890 and serves the vital purpose of promoting free and open competition in the marketplace. This federal legislation targets anti-competitive practices, such as monopolies and cartels, which can harm consumers by limiting choices and keeping prices artificially high. By encouraging competition, the Act aims to foster innovation, improve product quality, and provide consumers with lower prices. While the other options touch on important concepts related to business conduct and consumer protection, they do not encapsulate the primary function of the Sherman Antitrust Act. The Act does not specifically regulate prices, protect consumers from fraud, or involve the licensing of real estate agents, which are covered by different laws and regulations. Its main focus is ensuring that competition remains robust and unhindered, which ultimately benefits the consumer and the economy as a whole.