by fixing the price of bread to a value low enough for people to afford it, but high enough for bakers to not go bankrupt,

My understanding is that France at one point (Paris in charge) fixed the price of bread artificially low, to benefit Paris at the expense of the peasantry, with utterly disastrous consequences (famine, urban riots, and terror against the peasantry), and much later, after the Paris commune was overthrown and the leadership of the rural militias was in charge, fixed the price of bread artificially high, to benefit the farmers at the expense of the city folk.

I conjecture that it is this latter regime that produced competition on quality.