Whether you are in London, Paris, New York or Moscow it's early in the morning and you want a cup of coffee. How much will you pay? It depends; here in London you could pay anything from 50p through to £4.00 and I'm sure some readers will know of prices beyond those ranges at either end. Are those prices fair? Some seem ridiculously high; some seem worringly cheap!
Yes, they are all fair. Because people pay for them. A price is fair if it is sustained, if it is of value to the person wanting it. How much a bottle of water on a cold winter's day when you are perfectly hydrated? And on a blisteringly hot summer's day and you are 'parched'?
When setting your prices, move away from the defensive and just watching your competition. Build the value and defend the price.