Why Is Hi Fi Gear So Darn Expensive?

When I worked at a high-end store back in the late 70's the profit margin on most gear was 40% - which left some room for a customer discount to close a sale. I expect it is about the same today.

@emrofsemanon ​​​: I agree! Expensive audio gear is a status marker! The same sound quality can be had for considerably less!

Depends.  With a company I know about, the face plates were impossible to get made properly without spending WAY more than the owner wanted.  The internal components were picked BY HAND from boxes of the "TOP 5%" of the manufacturer's output--already expensive--and about 30% of THOSE were rejected as being inferior to the desired quality, etc. 

Labor to do this is expensive, boards ordered in less than 100,000 copies are expensive, etc., etc., etc.

If you decide to invent and make a truly super-high-end product that has little chance of failure, you spend a lot of money doing so.  Since the customer wants the company to last, and since you are not running a charity, you charge what it takes to keep in business.  Two of the best from the 1970's are still around; their stuff is WAY expensive today in my opinion, but it ain't 1975 any more.  Cars are WAY expensive today as well--5 to 10 times more than they were back then.  

SO, if you want the best, buy used like I do or settle for less-than-the-best if you can't afford new.

Cheers!

I often read comments that include terms like low-fi and mid-fi. What prices of gear would be in these ranges? Low-fi: less that $2500? Mid-fi: $2500-$5000, Hi-fi: >$5000??