Is it permissible to deal with a greedy merchant who overprices goods, knowing that there are cheaper alternatives?

The Shariah has not set a limit for profit in commercial transactions. Rather, it stipulates for its validity the consent of both parties, without deceit or fraud. The Shariah has encouraged leniency in buying and selling, based on the Prophet's (peace and blessings be upon him) saying: "May Allah have mercy on a man who is lenient when he sells, when he buys, and when he demands his due." The general rule is for a Muslim to love for his brother what he loves for himself. As for the questioner's statement, "I give him the price according to what is customary," its meaning is unclear.