Quote:
Originally Posted by murraypaul
Some people are willing to pay the higher price. More people would be willing to pay a lower price. When there is no incremental cost of producing another copy, there is more economic sense to price low and sell more. Unless you are scared this will damage sales of the paper product. Which is why it may make sense to keep the eBook price high while only the high-priced hardback is available. It depends whether by selling the eBook at a lower price you think you would 'steal' more hardback sales than you would gain new ones.
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Agreed, some people won't pay the higher price.
One of the calculations any producer makes when setting pricing is the optimum price. They may indeed be able to sell more widgets at a lower price. Will they sell
enough more to compensate for not making as much on an individual sale, and make more revenue and profit over all? One of the questions will be the production costs, and how much they
have to charge, simply to break even. Another will be how much they have to
make to remain a going concern.
So if I'm the producer, I'll make the best guess I can as to the optimum price. I may decide that selling my widget cheaper won't generate enough additional sales to compensate for the lower price and margin on an individual sale, and that the best price I can charge will be the somewhat higher one.
You might not be willing to pay the higher price, and refuse to buy. If I can meet my revenue and profit targets at the higher price, I don't care. That's your problem. You want to buy it cheaper. I want to stay in business. Guess which wins?
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Dennis