Why does creating a market cost M$?

This cost is not paid to Manifold.

Rather, this cost is used to subsidise the liquidity pool which is the mechanism that allows users to trade with one another.

Different types of markets have different initial costs due to how much liquidity they require to function well.

When a market resolves, liquidity providers receive any remaining Mana from the liquidity pool. So you will recover some of the initial cost. The more correct a market is at resolution, the less liquidity will be returned.

Also, we try to negate the downside of the initial cost with our unique trader bonus.