What makes an expensive speaker expensive

Sales of $150k speakers are extremely low. Production in very small quantities is very expensive, especially with exotic technologies.  In addition there is very expensive research and equipment involved, that has to be folded into the price.  Do you think that manufacturer is still in business only because of stupid/snobbish people buying their $150k speakers?

Well I do know a little about TAD, which at over $40k for a floor stander seems expensive . I believe TAD/pioneer spent over 3 million in r&d on the reference speaker line, so that must be factored in, but something tells me a lot of mass market gear and plasma tv’s underwrote some of that.

but I do see pricing on some speaker lines where a slightly larger cabinet and 1 extra driver of another model doubles the price, which makes me wonder.  Or a driver upgrade that raises the price 20 or 30k

 You raise an interesting and valid question.  I think basic business economics plays a very large role in determining price, especially when factors like R&D, product development,  and the very small number of potential sales  of ultra premium products are factored in. Top-of-the-line Wilson or Rockport speakers, costing 6 figures,  weren't just imagined and built.  They are the product of years of  development, a team of people,  and a cutting-edge facility.   Imagine if an Apple laptop would only be sold 100 times before the model was discontinued. Diminishing returns is a common theme in the audio world,  and chasing ever higher  performance requires more and more resources, time, and money.  I would be surprised to hear a $30,000 speaker outperform a $150,000 speaker. However, if you narrow that gulf a little bit,  it does hold water.   I would not be surprised to hear a $20,000 speaker outperforming a $40,000 speaker.  At that point it may just be the less expensive speaker is made by a company that made better business decisions, could afford it,  and perhaps sees a higher number of sales to justify it.   Sonus Faber now makes entry level speakers that are sold at Best Buy.  They also make a 6 figure  behemoth.   Wilson, Rockport, and Magico don't make a product under 15 grand.   Perhaps they should! 

To quote from Wiki:

"Adam Smith recognized that commodities may have an exchange-value but may satisfy no use-value, such as diamonds, while a commodity with a very high use-value may have a very low exchange-value, such as water."

But if Magico, et al, started marketing a speaker "under 15 grand", it would be labeled as "entry-level" and thus raise the price of the other products. @emailists is right insofar as the R&D and production put into these high-end products, much like a McLaren car or a Patek Phillipe watch - they are technically advantageous and, when paired with the right equipment, gorgeous sounding.

But for every TAD, Wilson. Magico, and other six-figure speaker, there are 3- and 4-figure speakers that satisfy the listener to the same extent.   

But for every TAD, Wilson. Magico, and other six-figure speaker, there are 3- and 4-figure speakers that satisfy the listener to the same extent.

until they experience TAD, Wilson, Magico ...