Which works best for a hobby business, A lower cost with more customers? or a higher cost with less customers?

A lower cost other than competitive market price with more customer which helps to reduce the cost per unit if turnover goes high 

If you do  it as hobby ,you rather choose lower cost with more customers as you are not mainly focused on profitability but the same time not loss .so you pursue as an hobby too.

hi cost with less custemers if hobby

A lower cost better makes big business 

A lower cost (but not too low below the general market price) is an ideal path for a hobby business