There is an interesting debate going on between Joel Spolsky and Seth Goodwin about whether or not the signal that a particular price sends is a bigger factor in the recording industry wanting to have variable pricing on iTunes or whether it's just a ploy to raise the average price of downloads.
I think there is a certain element of truth to both arguments, I think the record companies do just want to take advantage of popularity to make more money at the same time I've worked at companies where we've had to raise the price of the product in order for people to believe that the quality and service a product provides is on par with alternative options.
The thing which really resonates with me is the last statement Seth makes in his post, which incidently comes from Jeff Bezos:
I'd like to spin that: I think there are companies that try to make money by putting the customer first and I think there are companies that try to make money by putting themselves first (and falling back on branding or ubiquity). Over the long run, which company would you rather work for and which company do you think will do better?
Which leads us to the wisdom of Jeff Bezos. There are two kinds of companies, Jeff says. Companies that work to lower prices (like Amazon, most of the time) and companies that work to raise prices (like the music industry, all of the time).