Let's clear this up step by step. To understand why domain registration prices have really big difference we need to know whom we pay for and what we pay for. In reality you do not buy "domain name" you pay for the services that are associated with making this name accessible (findable) on Internet. The biggest portion of registration price get to "Registry" a company that owns the rights for the registering domain extension. Such Registry might control and manage one or multiple zones and this Registry sets the main price. Small portion from each domain registration and renewal (from $1 to $2 per year) gets ICCAN "The Internet Corporation for Assigned Names and Numbers". And small percent from domain domain name registration and renewal price gets registrars. Registrars usually provide domain and hosting services together.