Free markets work this way, but one is tempted to cap prices somehow. The problem is the incompatibility between price controls and free markets.

Once I visited a banker who was reading an ancient book (the Talmud) and asked him what part deserved attention during working hours. The text gives a clue on how to regulate this type of situation. It was something like this:

"You shall not markup over X% when trading with strangers and Y% when trading with your own people. Reduce the markup by Z% if the goods are purchased locally".

The concept is to cap the markup percentage (not prices), set as a function of the value added.

- When selling to your own comunity, the markup needs to be lower in an attempt to reduce social inbalance in the neighborhood.
- When just buying and selling with no added value, the markup has to be lower.
- When importing, manufacturing, transporting, fractioning or adding value in other ways, the markup can be higher.

There are many complications, it is not simple, nor easy to enforce, but if some type of regulation is to be enforced, I guess it should be along this lines.

All the best,