[daxat_staglatz]

It seems that you assume that if one producer sells its product for slightly less than its competition, then it will get all the customers, à la Bertrand competition.

But if it is not the case, and lowering your price only wins you _some_ but not all customers, then there is no reason to expect that the price point that balance gaining new customers vs selling each product for less will be equal to the marginal cost and not above.