I was looking at the pricing of you guys' cupcakes.  My sister-in-law asked me to make some cupcakes for their family reunion.  I was only charging her $1.00 per cupcake and she told me that was too expensive and that someone made her some cupcakes for 50 cents per cupcake.   I told her to let them do their cupcakes for the family reunion.  Was I wrong?

Maybe since you are family she was hoping you would bake them for free.  However, she should know what cupcakes cost in your area and compensate you at least for ingredients.  $1/cupcake is barely that. 

AWhoever is doing hem for 50 cents is losing money. You would probably lose money at a dollar a cupcake.

No, you are not wrong! I may do them for a $1 as a family discount, but there is no way in he...ck I will do them for $.50! I would bring them for free, if it were my idea, but when someone asks me to make something, I expect to be compensated.

They must be mini cupcakes.

AI have a cupcake menu with prices and varities on it--one list for the average customer, one for friends and family so they know up front and know what they're getting themselves into.

I sell my cupcakes for $2.50 and have a 20% off friends/family discount.  (This is only presented at my discretion.)  $2.50 is actually the minimum I would charge for my cupcakes (to a regular customer), personally.  I bake from scratch and ingredients are not cheap.  I'm using fresh fruit, butter (at $40 a case), and natural flavorings.  This kind of baking is not only more expensive than just using a mix (which is most likely what the person charging 0.50 is doing) but it takes more time.

Don't sell yourself short!  You were not wrong to turn down the order.  Probably saved you a giant headache!