Law of Diminishing Returns; where does it kick in?



I think that most of us who have been in this hobby for a while have experienced the "law of diminishing returns", the point at which spending a lot more money produces a little bit better sound or just tradeoffs.

I would like your opinions on where you believe this occurs in Speakers, Amps, CD players, and cabling.
ultrakaz
The rule of doubling is my rule of thumb. Noticeable differences occur when you DOUBLE the list price of a component. Since this is a geometrical progression most people reach a plateau very quickly! Please note that this is a VERY crude scale, and has much less of an application for speakers and cables.
Your question contains a false premise, I think: that there's some real relationship between price and sound quality. There is, today, some wonderful stuff at very reasonable prices, and some really bad stuff with price tags in the stratosphere. And given how much personal preference plays into this, it's quite possible that price and quality are random for any given consumer. That said, I'd offer a rule of thumb for three items:
Speakers: never.
I/Cs: $10/meter
Cables: $0.50/ft.
Beyond that, it's all personal preference.
Mr. Bomarc is quite right in pointing out that this is based on a false premise. Mr. Classsicjazz proposes that up to approx. $78,000.00 MSRP, you are still getting value for each additional dollar spent: I don't think that the said law kicks in at that point, I think it has then reached the point were it has been kicked to death and trampled for good measure. I remember years ago going through the October issue of Audio magazine and fantasizing by building the greatest system on earth by adding to my dream list the most expensive component in every category. Harmless fun, I guess, but not the way to building a realistic hi fi system to live with. It seems to me that a good number of participants to this forum appear to think along such lines. Any attempt at drawing lines at which one should simply fold his hand and walk out will be met by the bouncy rhythm of audiophiles jumping up and down claiming that every last microgram of "improvement" justifies any increase in price. The strange thing here is that we are not dealing with percentage increases but with multiplying the price by factors of two, three or four times and yet there are still those who contend that the perceived added benefit is justified. With no objective guidelines on how each component should perform, there is no way to set a dollar amount at which the whole thing becomes abusive. If you do as cable manufacturers do and claim that the whole thing is a question of aesthetics or perception, then the sky is the limit. I have no wish of leaving the bang for the buck brigade, so my priorities and price points are pretty well established in my mind and they are a lot closer to Mr. Bomarc's. Happy holiday season, one and all.
I agree with Jonathan it really depends who you are and where you are in life, but here is how I 'limit' things:
Digital source-$10k
Preamp-15k
Amp-10k
speakers-25k
cables:
-speaker-3k
-Interconnects-2k/per pair
-Powercables-1.5k ea.
Room treatment-4k

Now all I have to do is find my rubber check to order all of this stuff! But that is the most I would like to spend on gear, I would rather concentrate on having loads more software with a system of the caliber, I am about half way to my limit, so in a few more years we'll be there! Just need more time, after all I have only been into this for 2.5 years. Cheers,
Tim
I think the "law of diminishing returns", the point at which spending a lot more money produces a little bit better sound and/or tradeoffs occurs for every stereo component. I have spoke to many audiophiles that have said,” I spent the extra money but the sound was not that much better. If I had it to do again I would have not spent the extra money”.