Economics of the Cartel Market: Bioware should lower prices to increase profits

Comparing the sale of digital products in item shops to the sale of movies and songs is comparing apples to oranges. As there is no free alternative to the cartel market items, you'll always pay. Whether it's with cartel market items or time investment in the form of credits on the GTN. Whilst the entertainment industry has to directly compete with the free alternative, downloaded tracks and films.

And volume of sales doesn't work in the western world where quite a large portion of players is willing to pay, and quite a large top end is paying in the order of 100$.

Cheaper items much more apply to for example the Southern American or Asian market where the top end spends roughly 10$.

It is the western spending power which keeps these sort of prices high. It is that same reason as to why in China they could get monthly subscriptions to several MMO's for roughly 1 - 2$ whilst here we always paid closer in the order of 15$. These sort of prices are adjusted for maximization of profit, and that's dependent on our spending power and what players are actually spending.

Well, I wouldn't say that. The costs aren't extravagant, but still, expect even a simple retexture to cost about $500 - $3,000. That's salery for designers, reviewers and testers, write-offs for the computers being used, central heating & airconditioning, etcetera. I know some of you might say that you could make one in an afternoon. Well, maybe you could, and should look for a job in that line of work. But practically, one seemingly simple retexture can easily take a week. Adjusting colors and shades, attaching some extra objects as flavor details, cross referencing how it behaves with Unify Colors and having to swap your entire pallete around because some things mess up royaly or simply don't unify (they could actually improve that part of the testing, some items seem to have this reversed, with the primary, larger surfaces unifying to a secondary color and vice versa).

The revenue depends entirely about how often the re-texture is being sold.
Take the Outlaws set for example, it's pretty popular, and costs about $10. If the cost of that outfit lays around $1,000, then they'd have to sell 100 of those to break even. Now I suspect they easily sold a thousand of these. Still, that's 10% cost. Not counting the development or maintenance of the store itself. The Cartel Store itself I'd estimate at having cost about 20-30k, with another 1-2k a month for maintenance.

I think you miss the point, and psychology of the pricing.

In business, prices set the tone for something unique and of value. Its has a psychological impact to know it is something rare and more difficult to attain, and less likely everyone has... and therefore more people buy it.

So the rares should be priced as rares.

This is the pricing models for niche markets in marketing and management, they teach this stuff. The reason why it may not make sense is when the individual is a thrifty spender and does not care about exclusives. Then their perspective has a bias... but the 'market' is based on the certain demographics and the logic of the pricing as well. And as explained, it makes it harder to attain increasing its value.