Good question, to which there is no simple answer...in fact, there isn't even a complex answer that anyone can be sure of.
Anyone who takes a Macro-economics class learns that higher prices for any product or service causes demand to drop, and conversely a decrease in prices leads to higher demand. A great example of this is what's been happening with gas prices, people changing their driving habits or getting more efficient cars, so they use less gas.
If it were clear that decreasing the price of CDs would increase the number I sold substantially, I would probably sell Hypnos CDs for even less than they sell for now. The thing is, independent music CDs are a very limited market, not a commodity like gasoline or steel or corn with a very liquid market. A good argument could be made that most of the people who guy Hypnos CDs would buy them whether they were $10 or $16, and that many would still buy them if they were $20. Certainly the number of people who would say "I would definitely buy Message from a Subatomic World for $12 but I will definitely not buy it for $13" is a small number... a very small number, like maybe a few people, or at most 20 or something. It's not like with gasoline, where a gas station will lose 50% of its business if its price is .10 per gallon more than the station across the street.
Having said that, if I'm unsure where the optimal price is for Hypnos CD sales to "maximize profits" I'd rather err on the side of "too cheap, more accessible" because I'm a little uncomfortable with keeping "maximize profits" as my highest priority. I prefer to get the CDs into the hands of more people even if I could bring in more money, hypothetically, by selling 10% fewer CDs for $3 more per copy.
In fact, I've given some consideration to the idea of lowering prices even more. I think the music business has passed a threshold from which it will never return, concerning the free (as in, without paying) exchange of music via internet downloads. The number of people listening to ambient and electronic music is actually much, much higher than the number of people paying for it. Sometimes I wonder if many of those downloading unofficial (sounds nicer than saying "illegal") copies might buy the CD if it were just a lot cheaper, like maybe $10 or even less. In the abstract, I like the idea of selling 1,000 CDs for $6 each better than I like the idea of selling 200 CDs for $16 each, even though in the latter case, the return on investment is better (if you take into account that in the latter case you still have a lot of CDs left to gradually sell).
I'm not willing to just say "screw it, all Hypnos CD prices are cut by half" but I've considered releasing a less expensive CD or two and seeing what happens. If we put out another "various artists" Hypnos compilation and sold it for $7.99 for the CD, or $5.99 for the download, I wonder how many more we might sell?
I really don't have the answers, just expressing some thoughts. I don't feel inclined personally, though, to decrease the number of CDs sold even more, just to squeeze out another $2 or $3 from each copy sold. Also, the recording artists don't like that, because it means fewer people are hearing their work.