There are very few products where a price increase won't result in less sales. Economists even have a term for it: elasticity. And they also estimate it across a massive range of goods, finding the opposite of what you think.
Look at how much trouble a inflation is causing people to see quite clearly that small price increases on goods causes significant problems for consumers.
>creating a race to the bottom
So far this "race to the bottom" has resulted in just about the richest, best paid people on the planet. Even our poverty line is about the top 15% of global income, and that's pre-tax transfer. Post-tax transfer poverty line people make significantly more.
So I don't think there's really much evidence of your claimed "race to the bottom," unless we're spectacularly bad at racing.
I'm saying I don't think we've reached that point yet. In other words, I think prices are often as low as they are not because people won't pay more, but because companies have exploited the labor market to lower prices creating a race to the bottom.