It's called "what the market can bear" and it's what corporations with marketing and sales professionals have always tried their best to do; charge as much as you possibly can without losing business. Of course, it only actually works when there is competition, and so the rising prices are kept in check by undercutting competition.... and then, _that_ only works when the undercutting competition is working to the same quality (by a code, ideally) and is subject to the same economic pressures so that it can level out fairly. If the competition is all fresh immigrants with lower CoL, or if the competition is cutting corners, all bets are off. You end up with a race to the bottom, where each individual is trying to be part of a race to the top at the same time... everyone wants more than they're worth, but those who are actually doing the best work still aren't getting what they deserve, lol!
A free market actually requires a lot of surrounding regulation to work, just like any other freedom. It's always been strange to me that Americanism seems to view freedom as the fundamental condition of man, hampered by law; ultimately most freedoms come from rule and order, because they can carve out space for one to enjoy freedoms with far fewer negative consequences.
While I am not a free market absolutist, I think your assertion is based on judging negative outcomes of a free market vs the positive intentions of regulations trying to prevent those negative outcomes, i.e. you’re not considering the negative outcomes of regulations. I don’t think any free market advocate would state categorically that they produce perfect results, merely that any attempt to prevent certain negative outcomes through law will produce different negative outcomes elsewhere.
For instance regulations tend to incentivize very large corporations to advocate for more regulation as it raises the barrier to new competition entering the market place. Another example would be over burdensome regulations that slow the production of housing which constrains supply and prices a lot of people out of the market. I would have loved to take public transit where I lived a few years ago, but they spent a decade on environmental impact studies while traffic and the environmental impact from it got significantly worse.
There’s also a time component where the effects of regulations can take decades or even generations to really play out, but people tend to only remember the well-meaning goal of the regulation if they remember it at all. This tends to be very beneficial for politicians who end up being judged not on outcomes, but intentions.
Why should they charge less? Would you want to pay 50$ for unskilled worker instead?