A question on free markets

Hey everyone! I’m new to libertarianism but the idea of freedom, property and small government fascinate me.

My question involves price fixing. I’m quite terrified at the idea that a completely free market would encourage the manufacturers of goods to participate in price fixing. Let’s take wood for example, if all of the wood mills banded together and decided that a 2×4 will cost $1,000 what would the benefit be to stray from this price?

I’m sure someone would say that offering wood at a lower price would mean that more companies would also lower their price but wouldn’t that be a big assumption to make? After all, they’d be earning less than their competitors and potentially doing more work to produce the same amount of material.

What are your thoughts?