Consider the following two properties of the real estate market:

a.Commissions that real estate agents earn when they sell houses hover around 6% in all markets. Agents in areas where housing prices are higher (like Boston), earn the same percentage of the final sales price as agents in areas where housing prices are lower (like Fargo, ND).

b.Yearly incomes for real estate agents are not higher in areas like Boston (where housing prices are high) compared to areas like Fargo (where housing prices are low).

IUse insight from the model of perfect competition to explain how and why real estate agents' incomes are equivalent despite the fact that the amount earned per house sold varies across regions.

IIHow does your answer from (I) point to potential strategies that the collective group of real estate agents can employ in order to increase incomes in their profession?