Gaming

You raise the prices when demand is excessive and lower it when it is scarce, the price is usually somewhere in between. Businesses will give all sorts of reasons why something costs the amount it does except for that one which is usually correct. Madden series is a good example of this, the prices drop drastically as the new version comes out which indicates the demand drops drastically as consumers want the new version that is more current to real life rosters, stats, player abilities. Also if you sell something like potatoes and raise the price above competitor averages, your business will likely suffer. Game companies, noticing everyone else has their new releases at $60, they can get away with it, if they raise it to perhaps $70 consumers will just by the cheaper game. Once you take the case out of the wrapper, fewer people want it or will be willing to pay as much for it and the prices indicate that.

Of course production can be costly but the best way to deal with those costs is to list the product at the price that makes you the most money. If you price something too high you will make less money if fewer enough consumers are purchasing it than if you had the price lower. The inverse is also true so it usually the highest price the producer can get away with.