‘Cheap at half the price' would make more sense if it were ‘cheap at twice the price', as suggested, and some people believe that was, indeed, the original form. It probably came from the cries of market-traders/street-sellers, such as Del-Boy Trotter, shouting their wares. They might have cried:"This is worth £8.00 but I'm not asking for £8.00...all I'm asking for today is £4.00...come on, ladies and gentlemen...it'd be cheap at twice the price!"
For a more detailed examination of the phrase by an expert etymologist, click
http://www.worldwidewords.org/qa/qa-che1.html.