That's not quite true.

When it comes to certain luxury products, price increases actually do increase demand.

https://en.wikipedia.org/wiki/Veblen_good

It's why people pay thousands of dollars for a handbag cost maybe tens of dollars to produce. People like playing status games.

This effect is why third richest person on the planet is Bernard Arnault of Louis Vuitton, someone you've likely never heard of. He's currently wealthier than Bezos. He didn't actually improve our lives or revolutionize industry. He just latched into our primitive status seeking behavior.

To be fair to Arnault, he isn't just CEO of Louis Vuitton but LVMH which owns something like ~100 brands, ranging from clocks, wines, fashion, cosmetics, boats, jewelry and other retailing. Although to be fair to you, most of what they sell could go into the "luxury" category.

It's likely he wouldn't be the third richest person with just Louis Vuitton and it's probably mostly because of LVMH.

Graphics cards are not some idiotic luxury good. They are a tool, used for work or leisure, whose price points seem to be set at luxury level for essentially arbitrary business reasons.

It absolutely can. There's only 2 players in this business, 3 if you count Intel but their GPU future doesn't sound promising.

Nvidia sets the bar and AMD follows. AMDs prices have slowly crept up as well. So no matter what, you're paying much more for a top spec GPU today than you ever have before.

It's in the best interests of both Nvidia and AMD to keep these prices high, and it's a detriment to the consumer.

AMD did it with their CPUs as well. They undercut Intel with some great price/performance deals. Grabbed their market share back and are now bumping those prices back up to parity with Intel. Now neither company has to cut their prices.

Nvidia will use artificial scarcity to push these prices. We know they can produce a shit tonne of GPUs, they did it for years.

While what you say is correct, the recent Ryzen 7000 announcement has shown that AMD remains much less greedy than NVIDIA, because with the top Ryzen 9 7950X at $700, the price per core has remained less than $50, about the same as it has been since the first Ryzen, even if the cores are now much faster.

Before the first Ryzen, only Intel Atom CPUs had a price around $50/core, while the better Intel Core CPUs had prices around $100/core. Then Intel had to also follow AMD and drop the prices for the top models to around $50/core (the "efficiency" cores in Alder Lake and Raptor Lake count as a half core).

So there is still hope that the RDNA 3 GPUs will have a more decent performance/price ratio, even if it is unlikely that they will be faster than the RTX 40 Series.