What does "market or customer allocation" entail?

Market or customer allocation refers to a scenario where competitors in a particular industry or market come together and agree to divide the market among themselves. This typically means they designate specific geographical areas, customer types, or market segments that each competitor will serve, effectively reducing competition in those areas. Such agreements can lead to anti-competitive practices and are often scrutinized under antitrust laws because they can harm consumers by limiting choices and potentially leading to higher prices.

The other options describe various business strategies but do not accurately capture the essence of market or customer allocation. Setting prices based on consumer demand relates to pricing strategies, while allowing customers to choose how much to buy pertains to supply and demand dynamics, not competition among firms. Targeting specific demographics for marketing focuses on advertising strategies rather than the allocation of markets among competitors. Therefore, the essence of customer or market allocation directly aligns with the agreement among competitors to share or allocate their markets.