As I said, there are far to many merchants for an isolated prison island. Perhaps there should be a few people, that sell stuff. But only a few stuff and really specific stuff...
This. I don't think it's about pricing, but about the volume of items available. I want characters to have to make do with limited options. You shouldn't be able to get the second level skill/spell books inside the fort; maybe not even all of the level 1 skills are available without having to jump through some hoops. Finding the Seekers should open up your world a bit, but things should feel constrained until you get off the island.
