Quote:
Originally Posted by Ak Mike
Hi Taylor514ce - sorry if I was unclear. What I meant by "opportunity cost" is that a publisher has X dollars to invest in producing books. Whenever she spends that money, for example, on producing e-books, she has lost the opportunity to spend that money on trade paperbacks. Opportunity cost is just the fact that if you buy one thing, you have lost the opportunity to use the same money to buy something else.
So the money that a publisher might use to produce electronic books could be used instead to produce still more trade paperbacks. If trade paperbacks sell at a very high profit, she would be smarter to use that money to make more trade paperbacks and ignore electronic books - unless the electronic books could also be sold at a high profit.
Therefore, the high prices and (presumably) high profit margins of trade paperbacks lead to high prices for electronic books - since the e-books would not be worth producing unless they had comparable high profit margins.
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Thanks for the explanation. That makes sense; money spent on X means less money to spend on Y, therefor, Y is more expensive. But that's still a tenuous link to the conclusion that "trade paperbacks make eBooks more expensive". As I now understand "opportunity costs", anything a publisher pursues makes every other pursuit "more expensive".