It's all about perceived value, not actual worth. Before you price you products, forget about how much time you put into it or how much you think somebody "should be willing to pay". Think about how much it's worth to your customer.

Example: The Powerball lottery deal has a jackpot of over $200 million now. People are apparently buying tickets like mad, up over a third from when the jackpot was closer to $100 million.

What the heck? What difference can it possibly make to anyone that they're throwing away three bucks to watch someone win ten million or three hundred million? Look, you're not going to win. And even if you do, the amount extra you stand to gain doesn't come anywhere near offsetting the odds of winning. Your three dollars was a bad "investment" then and it's a bad investment now.

Even if we say you were going to win, what's the operative difference between $100 and $200 million to John Q.? If it was worth $3 bucks for $200 mil, why wasn't it at $100?

You do see my mistake, right? I'm thinking rationally, give or take. But people perceive that the lottery is, in some fashion, a better value now, so they shell out more bucks. It's all about perceived value (and probably a little marketing, in this case -- "Hey, come win one of the largest jackpots EVER!!!"), and sometimes, even when there's little to no real value at all, that perception can mean millions in profits.