Um, no, if you sell below cost you just lose more with more volume. You can sell some below cost if there are others paying above. Or other sources of income generated by getting butts in the seats so to speak. High volume and selling below cost usually means you go broke faster.
Except a dojo has high fixed costs -- rent, instructor support, etc. -- but very low incremental costs. Adding an additional student costs very little, and most of those costs (uniform, organizational fees) can be passed on to the students themselves.
Moreover, each individual class is like a theatre performance: once it's over, it's done. You can't put it on a shelf and sell it later. So, like day-of-show "rush" tickets on Broadway, you'll take any revenue that you can get from a teaching slot that would otherwise be empty.