Indeed.
There is also a matter of perceived value. People may see a 3-way BA setup that costs $50. Then they see a 3-way BA that costs $400. It is automatically assumed the $400 product is better. I mean it has to be, right? It's $400 and the other one is just $50. What if you were told the $400 product cost less to make then the $50 one? Now how do you think?
There is always a perception of quality from a price tag. It's a logical conclusion, and we are always led by marketing to believe it.
Do you think it costs GM that much more to produce a high level Cadillac off their assembly line versus a low level Chevrolet? A large number of the same processes and resources go into both, the same people, the same time. One has leather seats, an extra paint step, and 20 more parts out of the 500 that make up the car go into it. The price tag at the showroom is magnitudes different, 3x, 4x, greater. You buy it because you are willing to. You also buy it because other people haven't stepped in and undercut the business with a (knowingly) better product for cheaper. It's sort of like ClieOS's v3 shootout. Fischer Audio is new to most of us. As ClieOS points out, the Eterna is quite good, very good, placed along side the $400 IE8, but it's only $60. I mean it's not like the IE8 is a $400 IEM. It's not like Sennheiser needs to sell it at that price to make a profit. It's just that it's the market price range of that level of product that currently exists. Why sell it for $200 if you can sell it for $400?