Quote:
Originally Posted by AnotherCat
In industries that operate in competitive markets competition normally drives the selling price of a product close to the marginal cost of the last unit of production. This, as we see, does not happen in the ebook market.
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Ebooks, though, are not like physical widgets, where most of the cost is in manufacturing. The overwhelming majority of the cost of an ebook is not its reproduction cost (which is as close to zero as makes no difference) but the up-front costs of actually creating it, which costs have to be recouped via subsequent sales. In many cases, lowering prices will not significantly increase sales, thus the unit price is mandated by the expected lifetime sales.