Which of the following is an example of "blockbusting"?

Blockbusting refers to a practice where real estate agents or property owners induce panic selling or renting by informing potential buyers or tenants about the demographic changes in a neighborhood, particularly regarding race or ethnicity. The primary aim is to create a sense of urgency or fear that leads residents to sell or rent their properties quickly, often at reduced prices, which then allows the agent to profit from reselling or renting the properties to a different demographic.

In this case, the correct answer highlights the unethical practice of informing prospects about the ethnic makeup of the community. This information can influence their decision negatively, perpetuating racial and ethnic segregation and violating fair housing laws.

The other choices represent actions that do not directly pertain to blockbusting but may involve discrimination or unfair practices in different contexts, such as potentially discriminatory policies regarding families or occupancy limits, which could be problematic but do not specifically fall under the definition of blockbusting as it relates to demographic fears and community changes.