[GeoffR]

I once got a flight from London to Melbourne via Auckland that was priced lower than the the London-Auckland leg (of the same flight) by itself.

I worked for a company that imported watches and parts from Japan. In some cases it was cheaper to import a whole watch and pay a watchmaker to remove one part than it was to import that part by itself.

(Edit: I also have a collection of bicycles that I bought because it worked out cheaper to buy a complete new bicycle and use it for parts than to buy the parts.)

I just pre-ordered a three-book omnibus priced lower than one of the books contained in the omnibus. I also recently bought a seven-book omnibus that cost less than any two of the books in the omnibus. (Omnibus and individual books both by the same publisher.)

None of this makes any sense if you assume that price is based on cost of production.