I think that prices do always reflect fair market value. While there are some discrepancies and variable here and there, the price of a product or goods are usually a by-product of the fair market value. When something is cheaper or more expensive, it is due to what is happening in the market.
A bubble is when prices do not reflect market value. One may argue that since someone was willing to pay a higher price for something then that alone justifies the higher price. However, if I were to scam a foolish man into paying a fortune for a forged painting, that would not mean the price of the painting was "fair market value". The same is true for bubbles, whether it be artwork, real estate or BitCoins.
It is my opinion that price does not always reflect fair market value. For a number of goods there are additional variables that come into play when determining the price of them. In some cases the price of the goods may go up or down depending on these variables, and the new price will not always reflect market value.
A lot of the time price has to do with quality and reputation as well, not just fair market value. You can get virtually the same product, but if one product is more well known and established, then it's likely to have a higher price tag. It changes by store, too.
No, the price that we agree to paid is thought to be in direct relation to the cost of that item. In some cases this true, but in many it is not . The price we pay for any item is in direct relation to the value we perceive. This doesn't have to a straight cost plus fee relationship and many times is not. The best example is bottle of Coca Cola. If you buy it in case it cost around 30 cents a can. Buy the can individually it can cost up to $1. What explains the 70 cent difference ? The value or need at the time of purchase. In fact , the science of determining a selling price is art within it's self !