Point of note, tell them "here is the bare minimum necessary to make the show possible/successful" and the number that goes along with it. Don't tell them their budget is too low, tell them what it takes to get it done.
I always find it interesting how many companies ask the client what their budget is before asking what the system needs/requirements are even known.
Especially on bigger shows, I like to prepare a range of things I can offer to the client, but never ever quote a show with not enough rig to get the job done. Sometimes they have an excess budget and can get the finer optional things for the event, but in reality, there's not a ton of difference between the minimum needed to cover the space you need to cover and something 'better', especially when you're talking the needs for a very specific show. For an install, better might give you more options for uses down the road, but that's going to help at a single show.
And yes, when your price is much higher than the artificially low number they likely budgeted for, you either get them to raise their budget, or you tell them to have a nice day and find another client.
