Almost a classic example of a Veblen good. The demand doesn't increase uniformly as the price increases, but they'd probably sell fewer if they cut the price in half.

They've clearly found the sweet spot in the overall profitability curve, somewhere in the six-figure range.

alar44 is not talking about Birkins when he says 'Most luxury bags are a few grand tops, not 100s...' but the LV's, Gucci, Burberry bags most people with branded handbags have. Birkins are another class of their own.

It's a tiny tiny part of the market. Think $500 million yacht. Yes they exist, but 99.9% of them don't cost that much.