Price/performance curve

You've posed a very interesting question, and I'm not sure that I can answer it within the hypotethical framework you proposed. To some extent, the answer one gives depends a bit on how much you have to spend on high-end audio equipment. I suspect I am in the mid-range of audiophiles when it comes to systems. I have, however, been a fairly serious audiophile for 30+ years, and have also sold high-end gear on several occasions. In response to your question, I think the "knee of the curve" for the major components in a system (pre-amp, power amp, and speakers) falls in the $2500-3500 range, per component (MSRP). Within this range, you can buy some good-to-excellent products from a number of manufacturers, and assemble a system that is of very high quality. To get AUDIBLY SUPERIOR sound quality will require spending at least 3 times as much money. It also assumes that you have an excellent listening room, because at these price ranges, the listening environment becomes a very important element in the reproduced sound. With regard to other items in the system, I would posit the following price ranges at the "knee" in the cost/performance relationship: 1. Turntables: $2000 -2500. 2. Tonearms: $1500 - 2000. 3. Cartridges: $500. 4. CD players: $1000-1500. 5. Speaker cables (assuming an 8-ft pair): $500. 6. Interconnects: $200 - 250 per 1-meter pair. In assembling my own system, I was very conscious of value. In short, I want a lot of performance for medium cost (I bought a lot of my equipment used from listing on Audiogon). Here is what I have in my system: VPI HW-19 Mk 4 turntable with Rega RB900 arm and Shure V15VxMR cartridge; Lehmann Audio Black Cube phono preamp; Rega Jupiter CD transport; Adcom GTP-750 pre/pro; Sony D550 DVD player; JVC S-VHS videotape deck; Vandersteen 3A Signature main speakers; Vandersteen center channel speaker; B&W rear surround speakers; Kimber 8TC in bi-wire configuration for main speakers, and Kimber 4TC to center and surround speakers; Kimber Silver Streak interconnects; and various other minor tweaks and room treatments. I think my system sounds pretty darned, and so do other people who listen to my system. The biggest limitation I face is the size of my listening room, which is also the living room. To the extent I can answer your question within your model, I'd say my system rates around an 80 on the price/performance curve. To do better, I'd first need a different listening room, and then would have to roughly triple what I've spent to realize a substantial gain in audio quality.

Follow-up to my post: I realized after I made the post that I forgot a very important item: the amplifiers. I am currently using a Bryston 4B-ST amp for the front speakers, and an Adcom 5503 for the center and rear surrounds. I am VERY impressed with the Bryston 4B-ST. At it's price, it offers a terrific value and fine performance, particularly with its 20-year unconditional and transferrable warranty. I did not want to spend top-dollar for the surround amp, since I only use my main speakers for critical listening. I am quite satisfied with the Adcom for surround amplification.

Interesting question. Assuming MRSP, the 85 to 90 percent level can be acheived for $6k to $8k. The value of moving up from this level is extremely subjective. Even if money is no object, most people do not go beyond this level. If you do decide to spend the big bucks, you can obtain definite improvements in sound quality. However, the room and equipment compatibility issues become much more critical as the price of a system goes up. The most obvious benefit of spending the big bucks will be deeper bass and higher volume levels. Your heart of your question is "How do people value their money?" To use an analogy, for $40,000 you can get an excellent car, but that doesn't stop people from spending two or three times as much for what they see as money well spent. Are they stupid? I don't think so, but not being stupid doesn't mean someone is smart.