Lack of competition is definitely a problem in the pricing of some things, but I don’t think this is one of them, people just prefer what Microsoft offers and are willing to pay for it.
To be honest though, would I use it for my business? No. Broken formatting (for either my side or a client's side) isn't acceptable; the UI is two decades behind; LibreOffice Calc is still too incomplete; and who knows what's in a C++ codebase that old and that large (100,000+ files, 10M+ LoC) - it's basically security by obscurity. Microsoft Office getting hacked and fixed, is better than a target too small to matter until a government adopts it.
I don't think it is even a good competitor if you're actually creating bigger, slightly more professional looking documents / spreadsheets or want some quick working UI as a normal consumer. LibreOffice still cannot do live element updates which has been introduced with Office 2007!