Quote:
Originally Posted by rlauzon
You seem to have missed Economics 101.
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Let's say that today, a book costs $5 - $2 of that is profit.
Let's say that the cost of a book goes up to $7. Now the author has a choice: make the book cost $7 - and suffer a large loss of sales - or make the book cost, say $6 and see a smaller loss of sales - but his profit goes down to $1.
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Oh, please don't pretend to use Economics to justify this stance. As a former Econ teacher, it actually hurt to read this. Nevermind Econ, this is a basic word problem from math class.
Profit = Price - Cost
Except when Cost is greater than Price. In that case
Cost - Price = Loss
If it cost $7 to produce the book, and you sell it for $6, profit does not go down to $1 -- you lost a buck. That better be a rare occasion, or you better be making your money elsewhere.
As for...
Quote:
Originally Posted by rlauzon
In this way, not all the costs are passed on to the consumer. This happens frequently in many, many businesses.
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Yes, if they are counting on their income coming from some other source. For instance Sony could sell a game machine (or ebook reader) for cost or even less,
if they expect to make their profits from selling (or licensing) the software or content.
If an author is consistently losing money by selling their books, it better be a great hobby, because it is not much a business.
Now, let this be a warning... The next time someone brings up Economics, I'll start discussing monopolistic competition and then I'll toss in a diagram of the GNP cycle (just so we don't forget macro).
