The cost of a product is basically determined by labor, material and overhead. Top-notch players will use parts that are more expensive (i.e., you can get caps at Radio Shack for 49 cents but an audio quality equivalent cap can cost 20 dollars let's say.) Then you have to add the cost of R&D, insurance, sales and marketing, distribution, cost of money (borrowing to get the factory ready), and company human resources (health care, bennies, perks, etc.) On top of that there are taxes. Once all that is figured, then the question becomes profit margin, which is the toughest to figure since you have to take in factors such as demand and competition. All in all, it's way more involved but the bottom line is the cost of the parts required usually plays the biggest role.
It is rare that a product will be priced in the stratosphere for no other reason than just to make audiophiles take it seriously. Some do put bells and whistles on products such as exotic wood, lacquer finishes, overbuilt casings, hand-made components, etc, to make them appear better than others for those more interested in appearances - but may do nothing for the sound quality. But then again, some people can't get past the fact that they're listening to a $500 cdp (like the Marantz CD-63SE) instead of excellent quality sound for the money and then some.
It is rare that a product will be priced in the stratosphere for no other reason than just to make audiophiles take it seriously. Some do put bells and whistles on products such as exotic wood, lacquer finishes, overbuilt casings, hand-made components, etc, to make them appear better than others for those more interested in appearances - but may do nothing for the sound quality. But then again, some people can't get past the fact that they're listening to a $500 cdp (like the Marantz CD-63SE) instead of excellent quality sound for the money and then some.