Even worse: The woman at the counter couldn't say why it cost four times as much as the pretty-good Fred Meyer donuts down the street.
The real issue here is "pricing" -- process whereby a business sets the price at which it will sell its products and services.
Price your product too low, and you're not being fair to yourself. Price your product too high, and not only will you not make a sale, but you may not see that customer again...for anything!
I once had a client who charged about 1/3 more than they should have for a product they manufactured. Initially, sales were brisk as the low-hanging fruit bought the item. But within six months, sales were almost non-existent.
Another prospective client contacted me about 2-3 months ago with a terrific product. When I first met with him, I asked why his product cost about 50% more than his competitors, and asked for the data which showed that people would be willing to pay that extra amount.
Bottom line: If you have a product or service you're selling, ask at least a dozen people what they'd pay for it. Go online and see what others are charging.
And please...no $3.50 donuts!