I expect it’ll be priced not much lower than the entry level MacBook Air in order to get people to think “If I spend $100/200 more I can get a better machine”
This is intended to fight Chromebooks and Chromebook Plus. If Apple prices it $799, it's a non-starter. Schools and students will just go back to buying Google.
The idea here is Apple will give up margins for entry level devices. But in the long run, they gain a customer for life. The kid who grows up using Mac will be more likely to buy and recommend Mac and iPhone in the future.