In a farmer's market, they probably throw away half the produce, the margin is more in the quantity of goods than in the price, so it would always be better to try to get more goods for free than to put price down!
I don't think that any modern farm can sustain itself on farmers markets alone except when it's a hobby farm.
Everything not sold there will be sold to supermarkets in bulk. Farmer's markets are just a nice cherry on top where the margins are higher.
Also, a box of veg that was made well and truly unsaleable by a day at market would be thrown in the compost to be turned into next year's fertilizer.
The place I worked had ~10 acres in cultivation and grossed $200 - 300k. Their kids have college funds.
Put into that context, there is absolutely a bottom to the price it is worth selling at. If you are offering less than its value as chicken food, we won't sell. Admittedly, that is still pretty cheap.