Move on if you lose it. I have found that if your customer leaves you for a cheaper quote, they aren't worth having.
You need to increase the price in my opinion. I price jobs at £20ph domestic and £40ph commercial and I am in the tightest part of the country, West Yorkshire. The difficulty sometimes is the dividing line between commercial and domestic. The small guest house or nursing home as opposed to larger premises. From your comments, I would want £100 for that job. If you lose it just chase up some new work at better rates.