how does price fixing work, can’t anyone charge whatever they want for a product?
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The assumption is that a company will sell at a lower price to increase sales; that when a company wants to “beat” its competitors it will want to sell at a lower price. The hopeful idea here, is that the fairest (lowest) price is subsequently set by *all companies* selling the certain product, as ‘natural forces’ of ‘competition’ drive them each lower to match these competitors.
The reality is that the companies are all incentivized to sell at the highest price possible, to maximize profit-per-effort.
Price fixing is when companies specifically collude, and agree that they won’t go lower on their prices. This increases the profit per effort for all involved.
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You ask, Can’t a company sell at what price it wants? Yes it can! But that price will be *as high* as it can charge, not *as low*, as I think you’re curious about. The upper limit is about where customers just stop purchasing the product. If just enough customers agree to the price, it’s not too high from the seller’s perspective.
So, if two major companies are already selling high at fixed prices, then a third new entrant has no need or desire to go low, except perhaps to get their name out there.
In fact, prices can be artificially high without specific collusion, as companies observe each other’s habits. This is especially true when there is brand loyalty. If “inferior brand” that I don’t like is selling for $X, then I don’t mind paying $X+Y for “my brand”. (Back and forth among competitors to the highest limit.)
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In the real world, if a small new player enters a market and tries to low-ball on their prices, the established players with high prices will generally just buy that company, or perform other tactics to bully them out of the market, or keep them pinned in a metaphorical corner, if they can. At this point, many major corporations have vertical near-monopolies, so in reality, with many markets, the established competitors have sway with the pricing and availability of materials for any new competitors.
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So, others are stopping their assessments early, by interrupting themselves with what the laws are supposed to do. But in fact, price fixing has to be fairly blatant before it can even be called such.
Supply exists, and demand exists, but Supply-and-Demand as a natural device that *definitively* counters price fixing/gouging/scalping has yet to really be seen. Which I mention, because it seems to be the backdrop to your question.
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