Is it possible for a high end manufacturer to overprice their goods?

My daughter is a freshman business student.  I am a physicist.  She called me for help with calculus.  She was doing the standard first calculus problems for first and second level integration and differentiation.  In physics we do x, v, and a  (position, velocity, and acceleration).  In business they have a similar set of equations that we used to calculate the price point that maximized revenues.  Of course we had to have a demand vs price curve.  So in business theory, the price point where revenue will be maximized based on unit sales and price is easy to calculate.

@hilde45

Very good points. Well stated.

I think it is interesting to point out that, typically, "high end" audio is sold thru a dealer nietwork. So?

The dealer is the manufacturer’s "customer". And, the end user is the dealer’s "customer". While the manufuacturer is on "stand by" for tech support, etc. it is the dealer who displays, demos, delivers, sets up, and supports the end user. The dealer, being the "customer" also has to make smart decisions about what he purchases. The dealer must determine if a product has a high degree of certainty for sell through or he will be stuck with it. Or, risk selling it below what he paid for it. The penalties for the dealer for bad choices could be severe. So, there’s another "value proposition" in the equation, whereby, the dealer must (literally) buy in to the propostion. No dealer orders. No sales to end users. The manufacturer must FIRST convince the dealer that the product is worth the money. Then, it’s the dealer’s job to create value in the product to the end user. So, there’s another cost/performance filter (the dealer) in the mix before the product is presented to the end user.

From an economic perspective, the dealer pays wholesale costs, so the manufacturer’s selling price to the dealer is far south of the $133k the customer pays.. I am thinking about presenting a topic somthing like The Myth of Manufacturer and Dealer "Profits" to take a deep(er) dive into this subject. To this point, let’s take, as an example, a major contributor to the design team who makes $200k per year (could be low?). If the manufacture sells 2 million of the item, that’s $10 of the retail cost of the item for engineering. When only 200 are built, that’s $1,000 of engineering costs of the retail cost for each item. Some end users place a lot attention on parts costs vs retail priicing. Okay. Fair enough. But what about services we obtain that are purely intellectual with no parts costs? Should attorneys, consultants, etc. offer their work for free becuase their "parts costs" are free? It doesn’t take long to see how silly the parts cost vs selling price argument is. So, what is a product segment’s most gifted designer’s talent worth relative to the ultimate selling price? This is hard (impossible) to measure. 

It is also possible to under price an expensive product. Many audiophiles feel if a product seems to cheap for what it does there must be something wrong and won't buy it. I know that about 20 years ago the now defunct company Melos produced triode tube monoblocks rated at 400 watts(they did more) for $10,000 a pair. The dealers told the manufacturer to put a new thicker front plate on and call it a Mark II version because they could sell more amps at the higher price than the lower one. Melos kept the price the same.

@waytoomuchstuff I like the way you laid out those factors  and how they need to be considered when people "shoot from the hip," here, about whether a product is "worth it."
 
 You write,

"But what about services we obtain that are purely intellectual with no parts costs? Should attorneys, consultants, etc. offer their work for free becuase their "parts costs" are free? It doesn’t take long to see how silly the parts cost vs selling price argument is."
 

For me, this statement raises the question, "How many services are critical for a piece of audio gear?" It's clear how complicated this gear can become -- internally, but also with the elaborate casework, etc.
 
Then I think back to the very simple and massive pleasure I got from listening to, for example, a Quicksilver amp connected with Fritz speakers. Here, the overhead is so minimal compared to many other products, so the bang for buck value here -- sound quality per dollar spent -- seems very very high. Do these sound as good as other products costing 5x the price? Maybe not, but then those products very likely include a bunch of costs that Fritz and QS do not. Whether that's worth it to the buyer is their decision, but they have to realize that they are spending more on people who have nothing to do with the sound quality.

While I think it is interesting and instructive to affirm the many costs that go into every product, I think this has little to do with the cost to acceptance factor that is in my OP.

The question of whether something can be overpriced in this hobby to the point that all buyers say..no mas; is what I am questioning here. The example in my OP is of a speaker that has just received an absolute rave review by RH in the current issue of the Absolute Sound. I picked this example for a couple of reasons...1) it is priced at $133K, which only a few years back was almost unheard of for a piece of audio gear, and yet today, as other members have pointed out, is becoming more and more common and 2) It is a somewhat diminutive design that on the face of it does not seem to offer the glitz that a lot of ultra high end buyers are looking for...because they use their eyes as more of a factor than their ears.

To that, I noticed in the new issue of Stereophile, there is a reply to a letter by a reader from Jim Austin, stating the following: " the run-up in prices at the extreme high end is astonishing and concerning. It’s also logical. .......There’s a danger this could lead to too much focus on products for the wealthy and not enough for those of more moderate means--that is to say, most audiophiles. It could even cause the industry to turn towards fancy audiophile jewelry at the cost of sonics- because how many of those shopping at such prices are serious, critical, obsessed audiophiles?"

He then states:" Fortunately, though, most companies selling to that market seem to be doing it in a serious, uncynical way, exploring what can be done in engineering terms with such large budgets. Here's hoping the trickle down accelerates and that companies drunk on luxury high end cash don't forget about the rest of us."

While this may be generally true, there are certainly many companies that may not be complying with this...see my thread on the cable forum as an example.