I wonder how the gaming industry does it. Some companies have teams of developers working on games for well over a year. They have cost associated with advertising the games as well as cover art for the boxes and hire testers for their games, yet the price of games haven't changed that much for the past 10 - 15 yrs.
I think the difficulty for publishers is that they are maintaining/producing both a paper and digital version of books. Otherwise, I can imagine that they could change their business model so that they can sell ebooks for less.
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