There's no problem at all with undercutting for 1 gil. Your stuff may sell faster and people don't lose their profits and the market doesn't crash. The problem is people that undercut by lots and lots of gil at a time, crashing the market and messing up everyone's profit. The frontier ribbon was selling for 1kk on my server. The frontier cloth for 500k. Everyone was undercutting for 1 gil. Until someone decided to list the ribbon for 600k??? They undercut by more than 300k and now the ribbon barely makes a profit and the market is crashed. See how the 1 gil undercutters weren't the problem?