Extreme Market Board Undercutting is a Problem. Who ultimately benefits from this?

[Vahlnir]

Then I will continue to buy them all up and re-sell them at 300x the price. Also, I can understand with a popular item this happening. But what I've noticed is like 2-3 people will extremely undercut and then everyone just follows suit, which basically saps all value from the item.

You can keep buying things up and reselling them, but if there's an overabundance of an item or if the price is simply something people aren't willing to pay in a timely fashion, then the price will go back down regardless. Most everyone undercuts, even if it's by 1 gil, because people want to make gil. I undercut as well. Sometimes it is by 1, sometimes it is by 500 or more. But I usually only undercut massively if an item doesn't sell after a few days have passed. Then I just slash all my prices (usually by at least half but usually more) so I can post more things on the MB sooner. It works, and works well.