Quote:
Originally Posted by Shaggy
That doesn't change the fact that price should scale with cost, and the profit remains the same. If costs go down, then the price should go down, and the Publisher can still generate the same amount of profit to recoup their costs.
There's no reason they need to be making (significantly) higher profits on eBooks, other than greed.
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That would be nice, I agree. Unfortunately that is not the way things work in a capitalist society. The price of a product is driven by two factors; the cost of producing a product and the demand for the product. The cost of production actually sort of sets a floor for the price. After all, no one is going to intentionally sell a product at less than cost (unless of course it is to get them to buy something else... give the razor away for free and then sell razor blades for example). Once the basic cost of production and distribution is recouped however, the basic rule of thumb is to set a price that will maximize your profit. There obviously is something of a black art to that... more units at a lower price may or may not make you more money in the long run.
For a variety of reasons, companies, particularly publicly traded companies, have to do everything they can to maximize their profits. And yes it is greed, and that is how capitalism works.
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Bill