Most (sensible) businesses will opt for the smaller profit rather than pricing themselves so high chasing the same profit that they drive all their customers to the alternative and put themselves out of business altogether.
Not sure share holders would agree
Course they will, lets make an example, if asda sell 100 tooth brushes for £1 and tesco sells 75 of the identical tooth brushes for £1.33, they will both have sold £100 worth of tooth brushes.
Now, as Asda are selling more tooth brushes than tesco, they can buy them in at a lower price, lets say 10p each compared to tesco's 15p each.
Asda - cost £10, sales £100, profit £90
Tesco - cost £11.25, sales £99.75, profit £88.50
sometimes selling for less works better
oh and steve, comparing ford to jaguar isn't right, supply and demand only works for comparing the same (or nearly the same) products. comparing a budget car to a luxury car doesn't work.