Lots of people shop for the lowest price. Lots of people do not. When you set your sign out, you are making a choice about the market you want to cater to. If you lower your price, you are trying to attract people who are focused on the lowest price. Their loyalty to you is now based on you having the lowest price. There is nothing wrong with this per se, but keep in mind you will always have to chase the lowest price to keep their business. Someone else can easily make the same value proposition and undercut you. To keep your lowest-price focused customers, you must continue having the lowest price. In a sense you are putting yourself in competition with a factory farmer.
On the other hand, you can choose a different market. There are people who are attracted to the best value, or the highest quality, novelty, or the story behind the product. The most successful things in the world are not always the cheapest things. Customers who are interested in stories, relationships, quality - these are my favorite customers. It is easier for me to find ways to increase quality, get creative, tell a more compelling story, or demonstrate value, than it is for me to lower my costs.
If you are looking at straight dollar costs, why would anyone pay us $200 to take their family photos when you can get it done at sears for $20-$40? Well, those are two different products entirely. Sears is better equipped to provide people with a low cost solution, they are all set up for high volume. I absolutely can't compete with that. And I don't want to, either. As a small producer of photography, we have to consider what we can bring to the table that Sears can't. We lose customers I suppose because we aren't cheap, but that's fine because we end up working with a lot of people who are interested in what we offer creatively.
Quite often, the low cost supplier for common items (eggs, paper, clothing) already exists, and typically it is a huge corporation who can offer lowest price. That's great - it raises the standard of living for commodity items. People who take the time to make something homemade, like a pastured egg, should be rewarded for everything they put into it. It's a different product entirely and should be priced appropriately.
Look through Mother Earth New's pastured egg study, and you'll see what you are selling isn't really an egg at all, but a kind of culinary miracle