it goes against the spirit of capitalism

What you describe is not the spirit of capitalism. Of course, the cow farmer is free to sell his milk at under market value if he wants… but there is nothing about the spirit of capitalism that says that he should or that he must. Far more in line with the spirit of capitalism would be that the cow farmer, say, charges his neighbors low prices via handshake deals to keep things friendly, and then raises the price that he sells milk at on the open market in order to optimize his profits along the demand curve. And then, said farmer would likely expand his milk production operations in order to increase his profits more. Or else the chicken farmer might buy some cows of his own to cash in on the market demand for milk. The important part is that no one has to keep milk prices low out of the goodness of their hearts, because high milk prices are a good thing. They signal to the market that there is an untapped potential to make money if they just produce more milk. And that competition is what keeps milk prices low. The spirit of capitalism isn’t keeping milk prices low so that everyone can keep buying one handful of milk at the price they are used to. The spirit of capitalism is make more milk.

allowing companies like apple to inflate their profit margin from something reasonable to “whatever the consumer is willing to pay.”

In an open market, the price will always be set by what the consumer is willing to pay. Apple’s markup exists partly because of low-information consumers (“I heard iPhones are better, so I have to pay this price”), luxury buyers (they are buying because of the brand name, and often, because the price is outrageous, as a signal that they are part of the upper classes), and fomo (“I’m not cool if I don’t have the green dot!!!”). But it is also because Apple has a legitimate claim to being better than their competition - mainly because they remove options from their customers’ pool of choices. Searching for an android phone, you have an endless ecosystem of manufacturers, models, designs, features, and prices. If you are an iPhone user, you have only a few options. On android, you have a different flavor of operating system for basically every different phone you buy - often filled with each manufacturer’s bloatware. On an iPhone, you have iOS. And android’s PlayStore is full of garbage, trashy apps that try to scam you by impersonating other apps. iPhone users have the app store, which verifies the quality of every app that appears there. In a very real way, iPhones are the better phone because they allow their users to not think about their phone - which is the whole point behind Job’s “It Just Works” slogan from so many years ago.