The pricing (in this case a so called "high price") of goods is not really a feature of Capitalism per se. Capitalism is simply the private ownership of means of production, and using them to turn a profit. Lionel is using their relationship with a Chinese manufacturer and the tooling they own (somewhat jointly) i.e. "capital" to produce an item and selling it to make some profit.
Setting a particular price is largely a function of a free market, supply and demand, and competition. Raising prices because there is no competition is a form of rent-seeking behavior, and characteristic of monopolies - which is generally the antithesis of a healthy competitive market. Whether that is happening in this case is undetermined since other market forces have been at play over the last year. However, this trend was seen previous to current events.
In terms of a monopoly, we're not there yet in 3-rail, let alone O-gauge, but at one time there were more manufacturers and now there are less, so we'll probably continue to see this behavior. There will come a point where the price of goods and/or profit being made will entice someone to start a new business and compete with the entrenched interests one way or another. It nearly always happens.
It's well within any companies right to raise prices, but that's not capitalism.
