Keep in mind there is a different price break between purchasing a single cupcake and purchasing a dozen cupcakes. When deli/coffee shops sell a single desert they normally get a premium price for them. $3.00 to $5.00 depending on their clientele and type of shop. It is nice that you are thinking about the owner making a profit. But you need to keep in mind of your profit margin. My first question is how well does your cupcakes compare to the local bakeries? Taste and look? i suspect that yours are better. So start with the same price. The deli is getting a better product for the same price. And you will find that if they don’t think they can make a profit they will talk to you about your cost. At this point you will know if you can really afford to lower the price.
You can always lower your price without hearing a complaint but try to raise it, you will hear it.