try to study the price they are giving to buyers in that area to know how to fix your price to have more customers because customers use to consider price and quality of the product when buying the products, and if your price is cheaper than other sellers in that area and your product is good, you will definitely going to make progress in that area.
People basically set the price of what they sell based on the amount they bought it, so you can't advice a business owner to consider reducing the price of things they sell just to attract customers in an area where there are competitors doing same business because if they should do that they might run into losses, the only advice you can give is that they shouldn't fix the price of their products too high such that customers might begin to make comparison between the competitors in that region though sometimes what matters in a business is the quality of the things you sell, if they are of good qualities customers won't mind even coming from distant places just to patronize you without minding the price.
Recently the woman that sells table water at a lesser price in my neighborhood actually sell out than other competitors. And, I'm wondering why they've not thought about reducing their prices, recently the cheaper seller is gradually lifting up her prices after purchasing a new stock.
Hence, whatever a product is sold at, depends on the cost of material used in producing the stock. And nothing would stop a business from selling higher than they've spent in building a specific service. Hence, you are right, but in times of promo or competition cutting costs helps in reaching new buyers.