Final answer:
A firm charges a markup or markdown when acting as a dealer and a commission or fee as an agent. Exclusive dealing agreements are legal if they promote competition but can be illegal if they limit competition. Minimum resale price maintenance agreements are prohibited, although suggested pricing is permissible.
Step-by-step explanation:
When acting as a dealer, a firm buys and sells securities from its own inventory, charging a markup or markdown to earn a profit. As an agent, the firm arranges transactions between buyers and sellers for a commission or fee, without owning the securities itself.
An exclusive dealing agreement can be legal if designed to encourage competition among dealers, such as Ford Motor Company selling only to Ford dealers.
However, such an agreement can be illegal if it limits competition, like one large retailer obtaining exclusive rights to distribute products from several companies, thus hindering other retailers.
Minimum resale price maintenance agreements are also illegal as they restrict competition among dealers, although manufacturers are allowed to suggest minimum prices and cease business with those who consistently sell below these suggestions.