[Thaumatology] Setting magic item prices to make economic sense

[Pursuivant]

The demographics of your default medieval fantasy world, where only a tiny fraction of the population is capable of learning the Enchant spell makes magic items inherently rare and expensive.

Consider that anyone with the ability to learn the Enchant spell (i.e., IQ 14+, Magery 3+ , boatloads of spells, many VH) can probably make far more money doing almost anything else. They can name their price for their services in any major kingdom and can usually be far more effective casting spells.

At the same time, the average income is so low that there's no market for items which cost what a super-genius mage would have to charge to make the enchantment worth their time.

If you want cheap enchantment, you need a lot more enchanters and a steady market for very low cost magic items which are immediately useful to the 90% of the population who are working class farmers and laborers. Historically, that's why you had local wise women/hedge wizards or traveling hucksters selling cheap item with alleged magical powers, like love potions or Indulgences (i.e., sin now, pay a fee to reduce your time in Purgatory after you die).

As others have said, for game balance reasons enchantment is designed to limit the number of magic items on the market and to increase the costs of the really good enchantments to Defense Contractor/Luxury Goods prices. That means the only logical reason for the magical equivalent of Leonardo Da Vinci to enchant stuff is, a) Because they want to do it as an experiment, b) Because their government wants them to and is willing to pay the price, c) Because some super rich or super high-status patron is willing to fork out the cash for an enchanted novelty item.

Quick and Dirty enchantment brings the cost for lesser magic items down to "upper middle class"/"military issue" prices, but the demographics don't support the market because the middle and upper classes are tiny in a TL3 setting and travel difficulties limit how far customers can go to get to markets. A huge city might support a few specialist Quick and Dirty enchanters, who have a steady trade in selling expendable enchantments to a central government and a large local middle class.

The only magical setting I've seen where cheap enchantments are plausible, given the demographics, is the Harry Potter setting.*

* There's a large population of mages who can easily travel to a few centralized markets, creating both a marketplace and customers.

* Almost any mage, even one of modest abilities, can create enchantments.

* All but the most powerful enchantments "wear out" after a certain amount of time, creating a steady demand for new goods.

* Almost everyone has at least an Average income, allowing both capital to start a small business and customers who can afford magical goods.

* There's enough hand-waving of the economic underpinnings that the fundamental economics work. I.e., sufficiently large markets, ease of entry into the marketplace, sufficient demand to keep specialist enchanters employed.

As a result, there's a large demand for cheap, temporarily enchanted items like magical candies or newspapers. The concentration of mages in a few markets allows specialist magical shops to exist. Ease of enchantment and low cost of materials allows mages of modest magical power to make a living as specialist enchanters.

The most talented mages aren't enchanters. Instead, they're in "adventuring professions," such as law enforcement/military or highly valued professions like banking and healing.

*

Spoiler:  

I'm not going to touch J.K. Rowling's current political/social views, and accompanying psychological meltdown and brand suicide, with an enchanted 10-Foot Pole of Don't Go There. So let's not, please.