I run a small designer knitwear company and do all the pricing.
We make stuff that is unusual and distinctive. It's made with hand operated machines. We can change the designs quickly and alter patterns easily (if, for example, the black yarn needs a slightly different pattern to the blue) - to knit our designs with a fully automatic machine would require cutting edge five figure machines and then each design change would be expensive in programming time. To justify it we'd have to sell huge volumes, but our stuff is fairly niche so I can't see an economic argument to scale up that far. Not to mention that I think by the time we cost in the price of investment we'd not be any cheaper.
Our prices match other designer labels (yes, we do do a dress that costs the same as an Enve rim but we also do simpler things) but I am often puzzled when I look at other similarly priced labels and find that they're manufacturing in the far East. I don't get what the justification is - if they're charging that much surely they can afford to reduce environmental impact and pay minimum wage?