If demand exceeds supply, you have nothing to worry about. The undercut product will sell, and so will yours.

If supply exceeds demand, you will need to lower your price. The so-called "undercut" price is now the new standard, and you're going to have to adapt.

NO price for ANY product is too high, if the product sells. The act of the product being purchased justifies the cost. Buyers who complain about the things they want being too expensive are whiners, nothing more, nothing less.

By the same token, if your product does not sell at the price you desire, you are trying to sell it for more than it is worth. Any seller who complains about undercutters are whiners, nothing more, nothing less.

It's all very simple; I'm really not sure why people have so much trouble grasping it.