The reason people undercut tend to be either

  1. because they want more inventory space
  2. because they gathered the mats and can therefore make more profit even at lower prices because they don't have to worry about making back the cost on mats (an example: If Purpure Beads are going at 50k, and Asthethe's Cross-Pein Hammers are going for 300k, the the one that gathered their own shell clips can sell their hammers for 250k, and not only sell the item fast, but still make 50k more than the people that had to buy the beads.Going further, if they sell the Beads instead and the Shell Clips and Resin are going for 25k per 4 and 2 of each, then they would've made 100% more money than those that had to buy the mats)
  3. or because they find the items too overpriced and want to crash it.
None of these are mutually exclusive. A gatherer would obviously benefit from more inventory space and it is still possible to make a profit while bringing the market down. Especially if people buy your wares with the intent to sell them at the inflated markup you were trying to rout.