He even gives the rationale behind this approach. This is a widespread interpretation of AD&D's equipment prices, so it's fascinating to see that Gygax outright confirms this in this passage. There is no question that the prices and costs of the game are based on inflationary economy, one where a sudden influx of silver and gold has driven everything well beyond its normal value.
On page 90 of the AD&D Dungeon Masters Guide, there's a brief section that sheds much light on how Gary Gygax viewed the game's economic system.
