Why Such a Wide Range in Wine Prices?

You can find wine for five bucks. You can find wine for $100, $500 or more. Most of us that shop in the ten to twenty dollar range wonder what a $300 wine would taste like. What can you expect? Is more expensive wine worth it? Where are the diminishing returns? 

This isn't a scientific study. It's mostly opinion so I can't really answer those questions, but maybe help you figure it out for yourself.

The cheapest stuff is generally industrial wine made using manufacturing efficiencies, and some interesting additives. Your grapes aren't picked by hand, aren't sorted for quality, or made by hand in small lots. Does all that matter?

I avoid the lowest end stuff mostly because I'll be disappointed in the quality (but maybe you won't be) and I have health concerns about what I'm drinking. Many people will probably disagree with the latter, but you are more likely to find things like Roundup, Mega Purple, and MOG in cheap wines.

Is a $50 wine going to be better than a $10 wine? Almost definitely. Is a $100 wine going to be better than a $25 wine? Probably. If you know which one is the $100 wine you're more likely to say it's better. That's how the brain works in a consumer society. Will the $100 wine be four times better than the $25 one? That's an even harder question because that's almost all subjective. There likely are some differences in the quality of the grapes and how the winemaking was done, but four times better?

Will the expensive one age better than the less expensive bottle? No idea. Will the expensive bottle impress my friends more than the cheap one? Yup.

It would be a good guess that you'll find more of a difference between a $5 wine and a $40 wine than you will between a $40 and a $100 bottle. Diminishing returns. But where's the sweet spot for you? Where do you get the most bang for your buck? Is it $15, $30, $75? Some of the decision is made by your disposable income. 

What makes a wine more expensive? 

• The price of the grapes. It does vary by location, variety, and even the reputation of the vineyard.
• Small quantities. Small lots of grapes made into a wine that makes a couple hundred cases will be more expensive to produce than where you're making thousands or hundreds of thousands of cases.
• Other production costs from oak barrels to bottles. There are cheap and more expensive barrels and bottles. Some wines don't use barrels; some don't even come in bottles.
  
• Overhead costs vary. Large wineries have greater efficiencies. There are a lot of small wineries making a few thousand cases a year that have very fancy facilities for visitors. Somebody is paying for that, but nobody expects to see a guy in jeans with a scruffy dog at his side selling $200 wines out of a garage.
  
• Reputations of the winery, the winemaker, or the region. Some winemakers are better than others. Some regions just do better at cabernet or pinot noir. This doesn't mean all the good cabs come from Napa or all the good pinots from the Sonoma Coast or Willamette.
  
• What people are willing to pay. This is the big one. It's like with cars. Why is a Honda less than $30k while the same sized Mercedes is $60k? The Merc wouldn't be that expensive if people weren't willing to pay it.