That price is very low for most places. Compare your prices to custom cupcakes, not grocery store cupcakes that are baked, probably out of state, frozen, shipped and then iced with an icing that never has to be refrigerated and barely qualifies as food. Yesterday I bought 4 cupcakes at Crave and it was like $14. They were quite good, btw.
And keep in mind that not everyone wants to pay $2.50-$3.75 for undecorated cupcakes, but that doesn't mean you should lower your price for those people. Find people who appreciate the product.