Undercutting.

[Felessan]

That doesn't happen in this game - there is no real market integrity, anyone can sell anything at any price. People can sell SavageAim4 for 1 gil and sell 100 of them at 1 gil if they wanted to crash the market. Realistically SE should add in minimum listing price requirements for items we know are valuable, ie can't list SavageAim4 for less then 80k, or something to that effect.

They don't need to as scarcity limits the ability to undercut. There isn't a secret goldmine where you can mine SavageAim4 materia for pennies.
Regulations exist because they are needed to close gaps as real world is not perfect - you cannot have universal access to resources, you can be locked out of production due to transport/finance/whatever monopoly, companies have a running costs so they cannot easily stop/resume production (at least without heavy impact on job market) etc. In real world government not only care about quality of economics but also about job situation, quality of living (most of this in FF14 monopolized by SE) and other things that may worsen economy but make country healthier.
FF14 economy does not have all those problems so for it free market is rather good choice for perfectly matching demand with supply.