how does price fixing work, can’t anyone charge whatever they want for a product?
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Basically, in a perfect market, prices regulate themselves because of something we mockingly call “the invisible hand”
Say you have company A selling phones for $100. Then you have company B trying to sell a similar phone for $500.
Yes, technically company B can sell for $500, $700, $1.6 billion per phone. The price is theirs to choose. But all else being the same, people are just going to buy from company A, because it’s cheaper. So assuming no foul play, prices are gonna float in and around $100.
Price fixing is when companies A, B, C, all the way to Z, all come together, and agree “let’s all sell at $500.” Since everyone needs a phone, they have no choice but to buy from these companies, and have to shell out $500 dollars, for a computer that is worth much less than that.
It is illegal, because it is very much anti-consumer. It’s very similar to why we don’t like monopolies.
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