What makes an expensive speaker expensive

true, it depends on the speaker and it's design.  I asked Richard Vandersteen about this yesterday and he said that another reason a speaker can go from 600k to 100k is the amount sold.  If you have a speaker that you design and you will only be able to sell a handful, then you have to make up the R&D, overhead and marketing costs on fewer speakers, so the price will go up accordingly.  He had much more to say, but this was one of the big things I took away.

I would have to say the single biggest determinant of speaker price is price the market will pay which maximizes the rate of return on the capital of the speakers builder.  If it is not, it should be. This does not necessarily have any correlation to R&D, distribution or material costs.

Watts, everything is involved.  All the the topics we covered so far are a huge part of it.  Yes, market price matters, however what Richard said about going from 600k to 100k is a huge determinant.  If a manufacturer wants to do R&D that they will trickle down to their other lower lines, then they can make the assumption that at 600k, they'll sell only 3 for the year, but if they go 100k, then they can sell 50 for the year.  That would be what you are talking about I assume?  The market at 600k will relate to 3 sales and that's what the market allows, but at 100k for the same thing (economy of scale) then you sell 50.

That is generally what I am talking about, but more to the point: if the manufacturer is doing the analysis correctly they should estimate the demand across various price points and choose the prices that maximizes ROE. Often this is well in excess of underling costs including development (i.e., they realize a positive fully loaded gross margin).