Where you get into trouble with the guitar example is going under $300 (used). A lot of the beginner instruments (think: First Act) are so poorly made they’re hard to play without having work done on them by someone who really knows what they’re doing, and sound terrible regardless. Going from $150 (new) to $550 (new) is a huge difference in quality, and even a beginner will notice.

That seems to hold for a lot of instruments—there’s a price under which the quality’s so bad it could turn off someone who might have kept playing.