You are correct George dealers are free to set their own price. Manufacturers, distributors, etc., can sell their products for whatever price they want, to dealers (or individuals for that matter). But they can't attach strings fixing a price on subsequent sales, I guess that would be considered "price fixing". They can "suggest" what the dealers should sell for which is referred to as manufacture suggested retail price or MSRP. Other than Tesla, who markets their cars direct, I don't know of any other car or motorcycle manufacturer that can control retail prices. Of course this pits dealer against dealer competition which some dealers don't like. And as in your example it goes both ways, dealers are free to gouge as well as discount.
For example from the mid 1970's up until around 2000, when Skip died, there was a Honda motorcycle dealer, Skip's Honda, located in a large warehouse outside a small town in northeastern West Virginia that for years was one of (many years "the") largest volume Honda dealer in the country typically selling over 500 per month. He bought Hondas by the full truckload to get free shipping and usually a couple trucks every week, often more in Spring and Summer. He was the only salesperson (order taker really) with his daughter and two other ladys doing the sales paperwork. While his customers came from all over the US east coast, his main base drew from northern VA and DC roughly 100 miles east. No dealer would or could match his price which was very simple, every sale was the same, no freight and $100 over dealer cost. All the Honda dealers in the region complained to Honda North America that they can't compete with Skip's and Honda NA needed to do something about him. One relatively slow weekday I was there chatting with Skip and asked if Honda ever pressured him to quit discounting so much?
He said "oh yeah all the time, Honda's always sending in new sales representatives and they generally say something like Skip you need to increase your selling price otherwise I'll have to start restricting how many units you can buy. I just point to that (pointing to the large Honda sign outside) and say that's the only sign I have, you do that and that'll be a Yamaha sign." No way a sales representative wants to be the one to tell Honda NA "I just lost Skip's to Yamaha".
Unfortunately given the current shortages here now most sales are MSRP or higher.