The most I paid for a gig ticket was this year to see the Pet Shop Boys in Hong Kong. 125 quid for the front row and it was worth it. However, gigs in HK do tend to be more pricey than anywhere else for some bizarre reason. I think Ianrauk could maybe explain.
Putting on shows is a minefield when it comes to cost. In a nutshell, the venue charges the promoter a fee to put on a show, (On a side note the venue usually get to keep bar and food takings and for the bigger venues a percentage of merch sales, which can very profitable, but that's another story).
So ticket prices take into account venue hire fee. Which pays for the venue hire, venue insurance, backline ( staff, security, stage, backstage, cleaners etc). That usually works out about 20% of the ticket price. So 80% will be split between the promoter and the artist. Which is usually decided per show or tour basis or as contractual. We try to get at least 20-25% of the 80% leaving the rest for the artist.
The actual cost of the ticket is worked out to what the promoter, venue and artist think they can charge and their fans will pay.
Madge fans will pay that amount of money and despite what anyone says on here, I'll bet you 100% the shows will sell out. She's what's called a 'heritage' act. An act to see before either you or she's dies, and people will pay for the privilege. Especially as the London Palladium is in effect a small more intimate gig for an artist that usually only plays stadium and arena shows.