I think that argument only holds when the customer is informed about those specific tradeoffs. The customer will choose the cheap bulbs because they can't be sure the expensive ones are better quality. They often aren't.
Buyers want cheap bulbs, they don't want crap bulbs. If that means $1.25/unit is impossible, so be it.
Buyers want cheap bulbs, they don't want crap bulbs. If that means $1.25/unit is impossible, so be it.