Actually in the earlier days of capitalism, there was a common practice whereby companies would sell products below cost for the purpose of undercutting their competitors. Usually the company doing it is very profitable and has revenue from other sources while their competitors did not and could not compete with the below cost prices. They would eventually go out of business. Standard oil did this a lot to maintain their monopoly.
That practice is still around today, primarily under international law and is called "dumping" or "predatory pricing" Dumping can be defined as:
"the act of a manufacturer in one country exporting a product to another country at a price which is either below the price it charges in its home market or is below its costs of production."
It is actually an illegal practice under international trade laws but it is extremely difficult to bring before courts (both US and internationally) because there's a lot of hurdles to prove predatory pricing.
However, governments typically will not prosecute based on these laws because unless there's a clear cut case of an monopoly occurring or antitrust behavior, usually its beneficial to consumers. This falls under that category.
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