"If this wine cost any more, I could not afford it; if it cost any less, I could not drink it." I do not know who said it (Groucho Marx?), but it nicely illustrates the "sweet spots" (in just 21 words) that we all look for.
Businesses look for combinations of price and quality that work in the market -- and that allow it to stay alive or even prosper. I have no idea how they do it. Perhaps a small owner-on-the premises business has a shot at getting it done, although even that is not simple. I have no idea how a large enterprise like Toyota (for example) does it year after year. It's a very tough challenge. Success and failure (if allowed by politicians) weeding-out is all we have.
I am at a LV hotel for a meeting. The venue is an example of a corporation that has settled on a sweet spot (local optimum) that may or may not survive. My check-in took over an hour and it was downhill after that.
Low prices are available at this place (available because they are able to price discriminate) and quality is awful. Is that enough to survive? I do not know. I will never set foot on these premises again, but that is not a big deal. If they have not found a sweet spot, will they be saved/rescued by agencies of local, state or federal government? That is a very big deal.