
There isn't that much more expense in a big litter to a small only a small proportional amount BUT if you have more puppies your overheads can be regained from the first few pups and the money made from the puppies over and above the expense/cost threshold. litters with few puppies should be actually more expensive as they have less puppies to divide the expenses over. ( based on a litter with normal litter rearing expenses, excluding show costs etc etc )
Who sets the prices well that another story.. put it this way if people pay crazy prices then breeders ( well some) will continue to charge them. I have a breed with an average of 4 puppies, who can be prone to c-sections also but the average puppy price is £500.. With no above average costs it takes 2-3 puppies to cover expenses.
Whilst my opinion may not be shared with everyone I think the prices some puppies cost being bought for family pets ( above say £600 especially those from litters of 4- 5 plus) is not justified. I have had 15 puppies over 5 litters ( average 3 puppies per litter) , stud fee with every litter, one c-section. never made any money but didnt expect to but think I broke even overall or near enough. I also kept a puppy everytime which was the whole reason for having them. I do however spend several thousand pounds each year showing.
This itself to me should reinforce why puppy buyers should only buy from reputable show/working breeders. Puppies are as good as the same price but you get a whole lot more in my opinion in terms of real investment.