Read your contact fully. Does it say anything about this? If not then I don't see how it could be enforced. I would call a lawyer asap.
You really should be versed on this kind of information.
But going back many years to business law; the woman has no right to ask you to raise your price. If it is in the contract that you do the chances are that contract is null and void because it is against the law. Now it may be legal in some states, I don't know. If you were to agree to the higher price you would be colluding with your competitor which is illegal. Getting knowledgable on this should be on your to do list. If you can't in time I would tell the woman she is engaged in illegal practices and it is her job to maintain vendor tranquility not price tranquility. There may be a price of not being invited back next time she holds an event like this. Your competitor is a scumbag.