Sorry, the tooth fairy isn't real. https://www.propublica.org/article/amazon-says-it-puts-customers-first-but-its-pricing-algorithm-doesnt …
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Amazon puts Prime in buy box bc customers prefer more $ for 2day shipping up to a point. When there is >1 Prime offer, cheaper one gets BB.
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Also - loss leading has been happening literally since the dawn of retail. Every retailer does it, including all of Amazon's competitors.
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Impossible to simultaneously maintain lowest price on 500m+ items. Also, Amazon doesn't set the price. It competes with 3P sellers.