As pretty much every commodity Art follows the laws of Supply and Demand.
Which means the number of pieces available and the number of customers wanting to buy them determines the price.
Quality is of course a factor but it will automatically take care of by the Demand anyway. As of course products of higher quality are more desirable. Take this example to make it a bit clearer.
A unique painting of Picasso last sold for $ 5 Mio. Imagine for some strange reason someone found 1 more original piece of exactly the same painting. That would substantially lower the price of both of them.
A big pitfall I often have experienced with artist is that they trying to calculate the price in time taken, money spent on canvas and paint and a profit of what they think they are worth.
This is of course is very important for internal cost accounting from a business point of view but again seen from the outside it is just a product they are creating which gets its evaluation on the market a bit like in real estate.
Funnily talking to Insurance brokers they will tell you that it is very hard to insure Artwork especially from not well known Artists. Their evaluation approach would be: How many pieces of art has the artist sold for what amount. Or what could the actual costs of repainting the artwork be.
Any way we all love it and need it. So keep producing.
By Rico
