The existing answers are good, and I agree with most of the price ranges that are mentioned. There is a huge range in rates and they are most affected by the region and the type of organization you are dealing with.

For example, a small shop in E. Europe that is exceptional in Ruby and has professional management, great communication skills, and the ability to work agile (for real) is going to cost in the high 30's. A company in the same region but with less mediocre communication skills will get you into the 20's, but it won't be the same experience. In India, it's similar but the entire price range is a bit lower.

In order to understand how much you should pay, we use a simple approach like this:

- we figure out what kind of client you are. are you a bootstrapped startup? are you techy? can you manage it from your end? Do you have time to take on a lot of QA? are you experienced with this?

- knowing your client profile we can determine what kind of vendor will be successful with you. if you are an experienced client, have outsourced before, and know the ins and outs of software development you can work with freelancers, boutique shops, etc. if you are inexperienced with software and haven't managed this kind of thing, we might look for more of an agency type shop that will provide really good PM and awesome communication, etc. If you are pretty experienced and going long-term, you might consider an ODC model, too.

- Knowing the type of client you are and thus, the type of vendor you need allows us to recommend a region and specific development shops for you. When we know what/where we're looking for, it becomes easy to answer that magic question ,'how much should I pay?'.

This is basically the process that our entire business is based on :) Check out this video series that explains the process in more detail (complete with 2014 pricing numbers).

Good luck, and feel free to reach out if you need any help choosing that perfect development shop. They are out there.