"Also, in a free market, competition is not designed to drive your competitors out of business."
Yes it is. They don't have a right to be in business if they can't provide services and goods a competitive rate.
"It is designed as a place where customers can bid on available commodities."
Freely and at whatever rates both parties agree on. The government has no legitimate power to interfere.
"If the farmer's market in our area had someone come in week after week giving away what everyone else was selling, then it would surely drive the others out of business."
And they would perfectly within their rights to do so.
"Just because I have water in the desert, it doesn't make it ethical for me refuse water to a man dying of thirst until he signs over all his property and accounts."
Forcing someone to give another their property because of alleged *need* is immoral.
"The market might be able to bear it at that moment in that situation, but it is clear extortion."
No, it's a free market.
We have vastly different ideas on what constitutes a free market.
Our here in farm land, when they take the cattle to market and folks stand around and bid on them, we understand what market price means.
As soon as all those bidders have a gun to their head, then it is no longer a free market.