What is the definition of price-fixing?

Price-fixing is defined as an agreement between competitors to set prices at a certain level. This practice is considered illegal under antitrust laws because it disrupts free market competition. When competitors agree to fix prices, they eliminate the competitive process of pricing, which can lead to higher prices for consumers and less choice in the market. Such agreements can happen explicitly, through direct communication, or implicitly, through mutual understanding among competitors.

The other options describe legitimate business practices or concepts that do not fall under the definition of price-fixing. Setting prices based on market demand reflects a compliant approach to pricing strategy, while improving profit margins through negotiation pertains to legitimate contract negotiations. Analyzing price elasticity of demand is about understanding how quantity demanded changes with price variations, which aids in strategic pricing but does not imply collusion among competitors.