"The Law of Diminishing Returns"???

It is partially true unfortunatly, the breaking point moves left or roght depending on your room size, musical preference and .. yes.. disposable income.

Fernando

It's an exponential curve. I've always felt that--and it's true in most things. Everything from houses to cars. You can get a really good performance car reasonable--the Subaru WXsi (think that's the right model number). It's a 5 second car. You can get a really really good sports car for double that. And then you can get some incredible exotic for $100k+ and a McLauren for about 4 times that.

Luxury homes are the same way. $ per square foot goes up dramatically for better everything--but by how much.

Audio is no different, it's a luxury, and it's a combination of what Elizabeth said and to some degree what you want. Some people want a certain look and ergonomics even though they know it may not sound is good dollar for dollar.

What's my personal take on it all? You reach the point of dimenshing returns very fast if you haven't dealt with room acoustics. Of course, that's my own admitedly biased opinion--but I do think it's very true. Once acoustics are dealt with, it's amazing how modest upgrades can make a much more significant difference.

Now, here's a story that I hope you get some entertainment out of. I didn't--and you'll see why. We demoed a PARC unit for a potential customer (one of my dealers actually). As you may know the PARC goes between the amp and pre-amp and thus requires an extra interconnect. In this clients home the bass peaks were a real problem, around 10 db at one point. So the PARC made everything sound so much better it wasn't even close. But the client decided not to buy the PARC at this time, because he didn't want to spend another $11,000 on that extra set of interconnects. I could have put in some really nice $1k interconnects on both ends added the PARC, had far better overall sound, sold the other interconnects and possibly made change--go figure.

Interesting thread. Everyone has made valid points already, I'll just add my two cents.

In my opinion, with this hobby there is no absolute. There are too many opinions, theories and variables to think otherwise. One reviewer gets blasted for treating his room for a more "accurate" presentation of the equipment while another gets blasted for being honest about existing room modes. One cable manufacturer says anything other than silver is junk while another makes outrageous claims about copper. Some think DIY'ers are cheapskates while others think its the only way to get it done right. One thing we must do in this hobby is decipher or filter through all the information, specs, reviews...and forums...we can't seem to peel our eyes away from, and get out and make our own decisions and conclusions. Do your own experiments, its fun and you'll learn alot about the gear and yourself. At least get out and see if your own opinions align with anyone elses.

Diminishing returns, of course. But the point where cost versus performance starts to dimish is different for everyone. Its different between components as well. There is always the point where it will cost X amount of dollars for a component to cover all the bases...at least the ones important to you. After that its up to you to assess the worth.

I think that the Law of Diminishing Returns really does exist, but the problem is perpetuated by the manufacturers themselves. I'm convinced that many manufacturers make a new component(as a prototype initially) then assign a value to it based on it's sonic standing amongst competitors products. So if a component is manufactured that has a potentially low retail price, and is astonishingly good for the money, then the public rarely gets the benefit of it, because the manufacturer jacks up the price so it sits nicely alongside competitors products in a similar price range. I believe this is rife in the cable manufacturing industry, where exorbitant prices are charged for cables with an apparant low material cost. Then when the pricing is questioned, we are given the usual "high cost of development' speil.

So basically, the standard could be a lot higher, for a lot less, and the point at which the laws of diminishing returns come into play could be at a much lower price level, if the manufacturers were brought to task over their peer driven pricing policies.

It's funny that this happens unabated in the high end audio industry, and the buying public rarely questions it.

I just bought a Toshiba unit that plays Video DVD's, CD's and various other discs. It has Dolby Pro and a built in 192khz 24 bit upsampler. It sounds remarkably good against my $5000 CD front end. I paid $59.00 for it, brand new from Best Buy. Now you tell me that the high end manufacturers are not 'price fixing'.

Rooze

We just moved one of our systems from one room into another. If it had started out in the latter room, we would have surely traded out components and cables in order to 'get it right'. Only because we've already heard the system in the first room do we know that it works for us, because right now in room #2 it sounds mediocre at best. So yes, Rpatrick, the room treatment is crucial. I've been in several listening rooms in which the treatment simply negated the effects of the room, and the speakers which were seven feet from me sounded almost like headphones. No joke.

Also, Magnepanmike is absolutely right that the improvements up the audio cost ladder are often huge. However, the question is always "Does that work with the other components toward the end goal of meeting MY standards of satisfaction?" Everyone seems to agree that spending more often gets you more, but is it necessarily more of what YOU want? I've literally gone from one opinion extreme to another after doing something as simple as swapping out interconnects. And the component I was deciding whether or not to keep were the speakers, not the interconnects.
Hopefully, all of these responses have answered your initial question.
All the best,
Howard