It's a good example of how the market actually works. There's a lot of psychology behind it of course.
I remember what the owner of Audio Epilog, a small loudspeaker manufacturer from Croatia, once said. While they were selling their speakers at high prices, they sold pretty well. He wanted to make it more affordable for the customers and the sales dropped. In fact, they dropped so much that they had to increase the prices to be higher than they originally were to save the company from bankruptcy.
The point is, Audio Epilog sold their speakers because abroad they were seen as a boutiqze company from an exotic country. Even though I live in Croatia and there is nothing exotic about it to me, I know that's how North America perceives us. As soon as they decreased the prices, there was suddenly nothing 'boutique' about it and the speakers became something cheap that's not made in the US.
Luxury industry works like this all over the world. We are not talking heavy machinery, ship-building, pharmaceuticals or semiconductor industries here and you don't die if you don't have it.