What makes an expensive speaker expensive

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 ...

Money make an expensive speaker more expensive.