Did you ever think that bcause there are fewer people purchasing these products the model railroad companies have reduced the production levels. Reduced production levels means that the fixed cost loading on each item increases. Manufacturers don't want excess inventory laying around so they operate on a made to order basis. That is the nucleus of the so called 'pre order' method that is currently in vogue. So basic Keynesian economics tells us that when supply goes down price goes up. That causes demand to go down which causes supply to further contract and price goes up again. It continues until a new price point is reached where there is an equilibrium between supply and demand. It doesn't happen overnight but it happens. The fact that prices for new product keep increasing is an indication we have not reached that equilibrium. But why did the hobby shop close? Maybe the reason was that it could not compete with mail order or the internet. What we are hearing today is that hobby shop have been and still are closing because their fixed costs (rent, taxes, utilities, insurance, etc.) demanded they sell product at a price point that was higher than their mail order or internet competitors. The hobby shops that are closing are those who did not get into the mail order or internet market.