It depends what "cheaper" is being compared to. There are diminishing returns on both sides of the average.
You can find 99 cent, 5 dollar, and 50 dollar colanders, for example. the 5-dollar colander might be made of stainless steel, be well built, and have a detachable handle; the 99 cent one might be made of brightly coloured ABS plastic that makes it look like a babies teething instrument, and be made from a mould that was clearly overused about 5 million times beyond it's rated useful life, with a handle whose poor moulding digs into your hands. The 50-dollar colander might have some fancy adjustable sizing with a leather handle made of the finest leather from endangered dolphins, and a solid gold rim with accents painted by monks in an isolated monastery in tibet, with a built-in scale to weight it's contents.
the 99 cent is cheaper than the 5 dollar one but it definitely sacrifices quality. the 5 dollar one is cheaper than the 50 dollar one but doesn't sacrifice anything as far as the product's purpose is concerned.
By the by, dollar store eBay web-hosting falls into that 99 cent category.