That's contingent on the competition offering a similar experience and quality, at a smaller price point. As a parent comment pointed out, no LEGO knockoff has been able to provide the same experience as LEGO.

I think what the commenter is getting at is that it's not even about competition. People get mad when companies charge more than is necessary to make what they deem a reasonable profit.

Of course, as you mention, in capitalism, a competitor is free to go in and undercut the leading brand, but they have to be able to sell why they're better AND cheaper.