how does price fixing work, can’t anyone charge whatever they want for a product?
In: 82
1. fixed price > market price: flood of poor quality products. It gives opportunity to sell poor quality products for profit not available in free market condition, e.g. gun buyback program in US allowed profit from production of (at most) single use, dangerous, untested weapons from 3d printers. Also junk considered as weapon could be turned into profit.
2. fixed price < market price: black market is created. People/companies not willing to risk black market transactions loose. Basically it’s like an extra tax for them. Works best when fighting monopolies, so when there are very few companies offering ‘overpriced’ product. Shortages of ‘overpriced’ product benefits those who are either privileged to get it in legal way or those who can access black market without legal risks.
3. fixed price == market price: no effect.
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