In my own experience, reducing the price will only have so much effect on the number of sales. More important is the number of punters who actually want a CD. If they don't want it enough, you'll struggle to give it away.

From a punter's perspective, I'd also be wary of buying a CD that's priced too cheaply, particularly from an artist I didn't know. It suggests to me that it's been cheaply produced and isn't worth as much as a full-price album (only £5 CDs I've seen at gigs are home-produced, not-available-in-the-shops short-run CD-Rs)