Ken70 said:
No, it's obvious from this thread that the normal rules of supply and demand don't apply with NFA items. If the government wasn't limiting the supply, then the market would rule.
That is the real reason.
But it is not unique to NFA items, just more obvious and harder to work around.
Normal rules of supply and demand do not apply to a lot of firearm things.
Many of the most popular Concealed Carry pocket pistols would be illegal to import. The ATF has two lists for pistols and revolvers to score points that apply to imports but not to domestic manufactuers, and they include a minimum size and minimum caliber, along with some features that can increase costs over a rival that does not need to add something the market may not demand. Something like an LCP or P3AT would be illegal to import. This means domestic manufacturers do not have to compete with foreign manufacturers for a large segment of the market.
Many of the most popular long guns have 922r restrictions that prevent import in the configurations the market wants, and as a result have additional costs to turn a foreign made thing into what the market desires. This increases the cost and makes it easier for domestic manufactuers to compete because of that advantage.
China is also forbidden from exporting firearms to the United States, so while the vast majority of products the typical person buys come from China, firearm manufactuers do not have to compete with China (just ask our Canadians about all the quality Norinco designs they have access to and enjoy.)
All of these things increase the cost of firearms, but they also make producing various firearms something that can still be profitable in the United States. US based firearm production does not have to compete on an equal level with foreign producers like most other industries do.
As a result the firearm industry is one of the most protected industries in the USA.
As for NFA items specifically, the very real costs of business operating to produce items on a small scale or custom is expensive.
There is labor, rent, tooling, etc along with unforseen expenses like legal expenses, and still a strong profit margin necessary to make it all worthwhile.
Mass production is where things can be less expensive, but mass production of NFA items is not practical because of the laws and limited market.
Mass production costs even more in initial investment, and if the market changes or suddenly starts being sold on some selling point of a new design you may eat a lot of the cost.
For example I have seen many unrelated non firearm products sell better simply by having more features to list and tout, even products that had more problems, were less reliable, and of overall lower quality, than a product meant to do the same thing with fewer traits to list and use as selling points. So even making a quality product is not a guarantee, the market often has shifted towards desiring worse quality products that seem fancier or have more marketable features. If you invested in mass production of something that sells slowly and suddenly some new bell or whistle becomes a prime selling point, you can be in trouble if you already have tons of inventory without that bell or whistle that the market suddenly thinks is needed. If all that inventory becomes less desirable you may be going bankrupt. While if you stuck with low volume production you just adjust to the new market desire in a market that does not move a lot of product annually anyways.
The level of quality the market often wants can also be higher than would be the case if they were not bound to that item via an NFA registry. For example a sealed can that you throw out when it gets too gunked up may work elsewhere, but in the USA I would certainly want something that I can open and clean and maintain every component. I would also want a design that has reduced wear over many popular designs elsewhere because dealing with things like a new baffle can be a real annoyance with the NFA in place. So I may pay more for both a design and materials that would otherwise be excessive for what the can needs to do.
There can be unique market requirements because of the artificially created hassle of such a regulated item. Doubling or tripling the cost to create something that lasts much longer and is of a design that is much more convenient to maintain may be reasonable when that item is tied to you via a registry requiring a tax stamp with a several month wait.
