Reviewed by Vineeth | Updated on Jul 18, 2022



Fixing is the method of fixing the price of a product instead of letting it be obtained by the forces of the free market. Price fixing is not permitted by law if it involves cooperation from the suppliers and producers to fix the price of a particular service or product.

Fixing, usually, points to the price-fixing. However, it can also be applicable to other relevant factors. For instance, the supply of a certain product may be fixed so that it can go on and keep up with its level of price or further push it higher.

Breaking Down Fixing

In a free market, the price level of a service or product is obtained by the laws of demand and supply. If the level of pricing is higher, then a lot of people will want to get on the production side of it; but a few would be ready to purchase the same.

If the price is on the lower side, a few people will be finding it worth to produce it, and a lot of people would be willing to purchase the same.

Ultimately, as per economics, the price will be going to get settled at a level which will be acceptable by either side. This is the fair market value.

Classical Form

In the classical form, the fixing of the price is generally a method to force consumers to shell out more than what they intend to pay. It generally includes peers having an understanding in private to maintain their prices at a particular level and thus avoiding the competition in pricing, which will hurt them in some way.

Another way of fixing the price is an understanding among peers to not pay more than a particular amount for service or product. For instance, if two or more organisations decide not to pay a certain sum for a product, then it may qualify as price-fixing.

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