Originally Posted by rharv
I also think that particular price involves quite a bit of profit.
Sure, there's the R & D but I disagree on how cheaply these can be mass produced.
They try to balance price/demand/profit/cost based on a desired profit margin.

The formula is not based on how to sell the most units, it is based on maximizing profit.
My thumb-rule for costing was that I had to be able to make a product for 1/6 of the planned retail price. That may be nearer 1/5 in USA, where you don't have our typically 20% VAT.

20% goes to government in tax.
40% goes to the retailer.
20% goes to the wholesaler/distribution.
~17% is the cost to make.
~3% covers ancillaries, and profit.

I still find that shocking and have to do a reality check, but that's pretty much how things are.

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