Originally Posted by WizardOfBoz

If the bike is popular and up-scale enough so that shipping is a fairly small fraction of cost, eBay gives you a good indicator of market price.

The LBS's price is whatever they think that the market will bear. May be influenced by whether you're a good customer or not.

Right now the low end market may be being influenced by what I seem to recalled is the negative price elasticity of inferior goods*. When the average wage drops so that folks no longer buy a car (or a really top end bike) but they need transport, this increases the price of low-end models.

*Any economists can correct my terminology or skewer my explanation, as you wish.