@ja quality is definitley more important than cost. 100%.
I’m not interested in competing in a race to the bottom.
I do still feel there is a maximum price point someone would spend on a first casting kit, yes there are a few who may pay a premium but you still need to get them to buy your engine over a similar offering from an established supplier
You mentioned my engine with the horizontal flywheel. I would put this somewhere between a Stuart single cylinder oscillator and the Progress oscillator if looking a similar kits.

So a reasonable retail price might be £120, the only thing you don’t get with the stuarts is a tin of paint, otherwise they are quite inclusive. Allowing for a reasonable markup that will put your costs per kit at £60 and give you a similar gross profit.
Out of that will come design costs, making prototypes to prove the castings and design, Web site and web shopping. Someone to make up the kits and cut all the barstock, storage of same, someone to process orders and get them in the post, advertising and promotion which could be giving a set for review.
As the castings are going to make up the largest part of your costs it would be worth getting some CAD designs finalised for the patterns, you can then send the images and weight of the castings to a few foundries and see what it is likely to cost for say 5, 10, 50 & 100. No doubt using match boards would get the casting cost down but you would have to pay someone with casting knowledge to do that as it includes gates & runners not just the basic pattern for the parts.
If the sums add up then you can start pricing the materials, etc and then looking into the overheads to see what you may end up with for your efforts.
You would also need to decide what level of beginner you are aiming at. One who has just got a lathe and wants to start off with a kit. Or more likely someone who has had a lathe and possibly mill for a while, built a couple of simple barstock engines and a few tools and is now looking to try a casting kit, they are likely to need a less inclusive kit than a raw beginner and may not want to pay for things they have already aquired along the way.