Grandmajenny,

There is a huge difference between a hand made sweater and a factory made one. The people who are buying sweaters at $15 are NOT your target customer. They are Walmart's customer.

When it comes to pricing, I set my prices based on the formula outlined at
A Simple Formula for Pricing Your Work | The Etsy Blog

I do NOT work for peanuts. Because this is my business and my livelihood I do pay myself a living wage.

Personally, I cannot live on a salary of $5 per hour (which is approx $10,400 per year). What would you accept as a reasonable wage if someone were to hire you?

The way you are suggesting your pricing really isn't allowing you any sort of profit at all. Its the profit that allows you to purchase supplies for future projects and to expand the business.