Regarding the selling of more units to compensate lower prices, it's hard to speculate without knowing actual costs of development, but I seem recall having read somewhere that The Witcher had an investment of 8 million dollars. If this figure happens to be accurate, it means that if they sold 200000 Witcher units worldwide at 50 USD they'd have a 2 million dollar profit. And that's a pretty low number of sales.
Of course, all this hinges on whether 8 million is an accurate figure. And even if it is, it might not be representative.
Perhaps a dev could show up here and say what a Black Isle game usually cost to develop.