Say you get swindled by someone who sells say "rare chalks and inks infused with precious gems worth 50 gp" for 100 gp. Are you out 50 gp for your one casting of teleportation circle, or did you just get two spell's worth of components? To put it another way, is it the price at which you bought the materials, or the price they are inherently worth, that determine the gold cost of the material component? Is it based on how much it is worth to you, to the seller, or to the world at large?

I am under the inclination that whatever you paid for it is what it is actually worth. Of course, if it is your business to procure that specific item, you may have some leeway in that matter, but I would say the price you paid is what you get.

For the purpose of spells, it's worth the generic trade value of the component. 10sp is worth 1gp whether or not someone gives you the correct change. If an NPC sells you 50gp worth of incense for 100gp, then you're in a place with 100% inflation, which means you're taking a financial hit.

Obviously, in the real world, trade goods don't have a fixed value. If the market is flooded with gold, then the value of gold drops. However, in the world of D&D, economics are simplified and assumed to be relatively unchanging. Any fluctuation in pricing is assumed to be due to local circumstances.

If a character knows a spell I would think they have an idea of how much 50gp worth of a component was. If they went to a shop and the shopkeep tried to give them half the amount at the 50gp price the spell caster would probably know it and demand the proper amount. 

Now as was said, if for some reason that item is scarce in the region so the price is higher then the spell caster will have to pay more to get the required amount for the spell. So if you paid 100gp for 50gp worth of a component you still have 50gp worth of component. 

I think the prices of materials should be constant and not be cheaper or expensive in certain areas. The game gives sort of an objective value to the spell components, which means there is some absolute truth to what the components are worth, to both buyer and seller... This obviously isn't the case in reality, and as such I think DMs shoud be very careful with messing around with prices.

Like if I'm in an area with very few diamonds.. in reality those diamonds would be more expensive, but in dnd if they are more expensive, and their actual "worth" dont match  that inflated price.. how does that smaller "actual worth" relate to the local worth? Where does the "actual worth" come from? What if those are the only diamonds I have access to, now diamonds are simply more expensive than their worth in the campaign, which just becomes sort of a strange concept.

Since the game only gives us the amount in absolute value, it quickly becomes really weird if you then start adding subjective worth on top of it imo... You can certainly do it if you want to, but I think it brings more trouble than fun.

It's pretty much up to DM interpretation. I think the intent is that it's a particular amount of materials of a particular quality. The gold cost is a guideline for what that amount and quality is.

At a retail shop, you would expect to pay slightly more than market value for an item. The shop has to make a profit margin. And if you no longer have use for the item and want to sell it back, you would be offered less than the market value. Occasionally you might find a motivated seller, like a shop closing down, or the reverse.

I think each magic user knows the quality and quantity of materials they need, so there is no chance you spend 50 gp and end up unable to do your magic. However there is a chance a shopkeeper will ask 100 gp for these materials and tell you there's no better deal in town, when in fact another shopkeeper only asks 60 gp.

It's also possible for economies to vary. Perhaps dwarves who have abundant diamonds could charge you less than 100 gp for enough diamond dust to cast Greater Restoration. Or, in my world, there is a remote region in which gold is abundant. There, you might have to pay several hundred gold pieces for the basic incense for Find Familiar, as gold is of little more value than iron.

You said swindled, and magic doesn't work on self-delusion, so the magic user in question payed double for the spell components.

Do you allow your players to use Persuasion (or other relevant skills) to haggle with NPCs to purchase mundane adventuring gear/items at below (or above, if they really suck at it) PHB value.

If so: then spell components are just another item that can be haggled for.  "50gp of components" is easy shorthand that's useful for game design and helps ensure the players are appropriately paying for powerful spells, but in the world it's closer to "two ounces of alchemically purified metal salts" or the like.  A player can write "30gp of incense" or "three uses of Incense for Find Familiar" on their sheet regardless of what they paid for that incense.  After all, plate armor doesn't stop being worth 1500gp just because a player found it, or haggled the blacksmith down to 1000gp in exchange for a winning smile and a night of [SUPER REDACTED].

I don't see a point in treating spell components differently than mundane gear, at least inasmuch as their prices being negotiable.  Spell components are typically much rarer and less available than mundane gear, which usually means merchants don't accept as much haggling, but one can always try.

Quote from The_Treebeard >>

Say you get swindled by someone who sells say "rare chalks and inks infused with precious gems worth 50 gp" for 100 gp. Are you out 50 gp for your one casting of teleportation circle, or did you just get two spell's worth of components? To put it another way, is it the price at which you bought the materials, or the price they are inherently worth, that determine the gold cost of the material component? Is it based on how much it is worth to you, to the seller, or to the world at large?

I am under the inclination that whatever you paid for it is what it is actually worth. Of course, if it is your business to procure that specific item, you may have some leeway in that matter, but I would say the price you paid is what you get.

Teleportation Circle -50 gp rare chalk gem dust C, 18,250 gp + 1 year to be permanent. You were swindled out of 50 GP. You get one casting. And are free to hunt down and hurt the merchant who robbed you. To answer you second question material components are base on the world at large. 

I think of it as it costing 50gp to produce the good in question. If you go out and mine a diamond, you know the approximate value it would need to be to be able to cast revivify. However that same diamond with some work done to it can potentially become several uses of revivify if it gets cut nicely. What was a 100gp raw diamond becomes a 300gp cut diamond. If someone makes a magical component worth 50gp, if they sold it to you at 50gp they wouldn't make any money on it. Any individual known about how much material they would need to be able to cast the spell they want to cast, and if there is a massive upcharge for it that is a little suspect, but so would it be if they were really down selling it. If I needed 50gp worth of something and I could buy it at 200gp that is a lot and I probably wont be buying from that place. If I need 50gp of something and someone is selling it for 10gp that is also really suspect, and that thing may be cursed or stolen or something. In a world where there are magical requirements for spells the starting value of something would probably be done in relation to when the item can be used to cast the spell, not the other way around.

TLDR: For me the GP cost of something is how much it would take for the item to be crafted to make said item. If they wish to purchase it the seller can sell it to you for whatever amount they want in order to make a profit.