I don't have the time or inclination to instruct you in elementary business principles or practices. But I will say:
Competition is always a restraint on price increases. But whether or not they can reduce their ROI is irrelevant. Except for very short periods of time (price wars), they won't. The main goal of business is to maximize profits. The price is set at a point where enough people believe that there is value enough to purchase. If the highest price that will produce acceptable sales is too low, from the get go, to produce the desired return on investment, the business will fold.
I'm not sure I understand what you mean by "Wouldn't that price competition be equal in restraining them from increasing their prices for both adding to their wealth and paying a few more per cent in taxes?"
There is no "price" competition. There is only value competition. Maybe you can say it in another more understandable way?
But I won't spend too much time on this. You can study it yourself.
