Undercut them by whatever you feel like. Or charge more than them. Their desires are totally irrelevant, and price-fixing only hurts consumers and the economy.
Why do you think everyone hates cable companies?
Yes, it's just a game, but the economy works the same way excepting a system of interest. There's even taxes, ffs.



Just a note: I don't always buy from people on the top position if they're a gil cheaper. Your City State has a lot to do with when I'm likely to buy from you. If I'm at my FC house for example, I'm going to buy from Limsa Markets even if they're a little bit more expensive than the guy trying to get top position by a few gil. This is due to the fact I'm not gonna pay market tax which the guy undercutting a few gil, is not gonna make up.
I may also not buy from you if you have 99 stacks and are the cheapest, because I only need a few of those items and may be willing to pay 800 for 2 of them vs 500 for 99 of them.
Well if you're selling the big-ticket items (assuming you're selling big ticket items), it's going to draw a lot of competition. I usually avoid dancing with my competition, as I'd much rather profit off of them.
"Fun comes first. If it isn't fun, you're doing it wrong." -Naoki Yoshida
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