What is price fixing?

Price fixing refers to an illegal agreement between competitors to set prices at a certain level, rather than allowing the market to determine them through competition. When competitors agree to maintain prices, this action prevents free-market forces from working effectively, which can lead to inflated prices for consumers. By fixing prices, companies can control the market and profit without the natural checks provided by competition, which can ultimately result in reduced consumer choice and higher prices.

In the context of the other options, the idea of lowering prices or negotiating bids does not inherently mean that they are fixing prices. Lowering prices can be part of healthy market competition. Similarly, meeting to negotiate bids could imply a legitimate business arrangement if it involves competitive bidding practices, as long as it does not violate antitrust laws. Lastly, an agreement to increase product availability does not directly relate to price manipulation and focuses more on supply than on price itself. Therefore, the concept of fixing prices aligns most closely with the agreement among competitors to maintain prices.