I think Ron is doing a great job trying to help you understand every rule in play on the GMAT. That said, you need to learn to use a general framework to aid you in tough situations such as this one. In this case just ask yourself whether there is ambiguity caused by omitting "the prices were."
The products prices are higher this year than (the prices were) last".
First off, let's check on what's being compared - times when the prices were different. There are several ways this sentence can be written:
A. The product's prices are higher this year than the product's prices were last year
B. The product's prices are higher this year than the prices were last year
C. The product's prices are higher this year than they were last year
D. The product's prices are higher this year than last year
E. The product's prices are higher this year than last
In each of the versions, there is no ambiguity as to what is being compared. A and B, however, are awkward because of how wordy they are. In C at least, the pronoun they is used to make the sentence more concise with no change in meaning from A and B.
With D, the omission of "they were" doesn't degrade the meaning of the sentence. Why is that the case? Well, when you examine the sentence and focus on the comparison signal "higher X than Y" you notice that we're comparing when the prices were different. In this case, there isn't anything in the sentence to confuse this comparison in D, so it is completely fine to omit "they were"
On a final note, examine the omission of "year" at the end of E. It's pretty clear that "last" could only modify year so omitting year doesn't result in a loss of meaning. Still I strongly prefer D :)
Thanks,
Chris