It doesn't take an MBA to understand that raising or lowering the price of a product affects a company's competition in the market. Whether it's in response to consumer demand or a competitor's change in its pricing, companies are free to set the prices of their own goods or services. It's one of the main tenets of our free market economy.
But there are limitations to what companies can do when raising or lowering prices. A prime example is price-fixing, in which two or more companies agree to restrict competition by raising, lowering or stabilizing their prices. This business practice is illegal, and those who engage in it can face heavy penalties from the government agencies that enforce antitrust laws.