AMD will have to drop its price drastically to compete. 5600x can no longer compete with 12 gen Intel anymore. Only advantage AMD has is alderlake boards are lacking and extremely expensive. However, this will imprvoe over time.
And then, the Vcache from AMD, may not be even enough. HAving a bigger cache is cannot really overcome the core deficiencies.
Zen 3 isn't inefficient - it's actually starved for bandwidth, if tripling the L3 cache can improve overall performance by 15%. As for "can't compete", it actually can - it's a one year old architecture VS one that just came out, and their performance are almost equivalent. Give it some L3 cache, and it can compete with Intel's latest and greatest.
Remember that AMD used to sell their 6-cores Ryzen around 170 to 250 bucks not so long ago - they can still do that, and still make a profit. But, why would they do that when they're still selling everything they make? Heck, the main reason the Ryzen 3 line ended was because they didn't have enough defective chips to sell as 4-core processors! The 7nm Zen2-based 3100 and 3300X are almost impossible to find because they made so few of them.
If Intel really is a threat to AMD, with AMD's chips staying in stock more than a couple days in December, I wouldn't be surprised to see either the 5600X or the 5600G fall under $200, and/or a "Zen3D" processor coming out (5650?) for $300 that would still conquer the mid-range CPU market.
But, until the shortage resolves itself (either with Intel suddenly gaining back all the lost market share they lost these past 4 years or AMD suddenly able to push out more chips out of TSMC's factories), I don't see processor prices falling down that much - platform costs are still slightly in AMD's favor here.
All this, without even mentioning Zen 4.