I certainly won't pay it.
Somebody will. Vendors know that there is a fine line between sales volumes and markups. The higher the markup, the lower the volume. The lower the markup, the higher the volume. Taking all things into consideration, they attempt to set the price that returns the most profit.
For example, if the markup is $1, and you sell 100 widgets, you gain $100. If the markup is $100, you are obviously going to sell less volume because it costs $99 more. So you might sell one. Your gain is $100, the same as the previous example.
However, all else being equal, it costs less to receive, display, and sell one item than it does to sell 100 items. So the profit is higher with the markup of $100. Looking at it from a business standpoint, which makes more sense?
And yes, I realize that there are other benefits from higher sales volumes, such as exposure, more customers in the store who might buy other things, and so on. Those things are figured in as well in real life. My example is exaggerated, but it demonstrates the theory behind pricing.