It's simple supply, demand, and the want to make sure yours sells.

People charge way more than something is worth to account for "time spent". For example, if the cakes take 3,000 gil to make, and the going price is 8,000, then the people selling them at that price is figuring that their time is worth 5k.

But, if someone else who is bored or who comes by a lot of materials that can be used in making these cakes, decides that they're OK with 3k profit, then they will sell at 6,000. That might make you feel upset, but... maybe you were charging too much for it? I see some items on the market that are just insanely overpriced, like 30k for Lv20 tools and clothes and such, and that just makes me roll my eyes, especially the ones you can get all the ingredients from the guild. And I've checked, they sit and sit and sit and nobody buys them.

Seems the vast majority of people are out of touch with how much their time is actually worth if they think that 20-30k is fair for a Lv20 tool you can make from guild supplier-bought materials (which means zero work being put in). But that's just an example.

Either way, it's simple capitalism, supply&demand, and how much people are willing to pay for your time, and how much people think you should be paid. Maybe there are people out there who are aware that 5k seems a bit steep for whatever it takes to make crab cakes, and decided that they're gonna sell for cheaper?

At the end of the day, you can either buy them all up and resell (they'll just undercut you again) or maybe swallow your pride and sell at 6k. Maybe the old price really was too high.