This question has been asked a few times recently and so I thought I would answer it here. My book, Needled to Death, is priced at .99 for the ebook and 8.99 for the paperback; both of which you can purchase through amazon.com.
First, as the author I chose the prices and they are very low because I believe self-published books should be lower than professionally published books. The differences between self-publishing and a bricks and mortar publisher are numerous. But in terms of pricing it is the publishers job to see that the book is fully vetted, that there are no errors, that it is professionally proof-read and edited. While I did put my book through the editing process it was by no means rigorous (if you do spot any errors please let me know as with self-publishing I can change the copy instantaneously!). So a self-published book can be a bit amateur and the price should reflect that.
Second,the process of writing for me is long and arduous. I write, re-write and then do it all over again. In terms of an hourly wage the book should be priced at thousands of dollars. Sadly, as with the case of all the creative crafts, including hand-knitted items, the market-place will not support an hourly wage. That is the reality so when I priced the book I had to keep that in mind.
And finally, I want as many people as possible to enjoy my work and keeping the price low makes that possible.