I think $3,500 for a dog is reasonable, ONLY IF:
-The mother AND father are titled
-BOTH parents have health certificates (OFA/CERF and so on)
One of the breeds I show are Black Russian Terriers and they are sold for that much, and yes there's a market, HOWEVER, they need to have what I stated above, otherwise I think buyers are fools for paying that much.
There's no real reason for it, imo. If the pups are worth that much you should prove it on both sides of your breeding stock, starting w/ the sire and dam.
I'm NOT attacking anyone here, seriously. I don't know what this breeder does/doesn't do w/ her dogs, I was just addressing YorkiRini's opinion.