Quote:
Originally Posted by Jack B Nimble
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.
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Then, if you would actually
read my message, you would see that my logic was correct. My wording may be off, but the logic still stands.
To use your wording:
The cost of producing an eBook is $3. Plus $2 Profit. Making the price of the eBook $5.
The cost goes up $2.
The author has a choice:
Pass the full $2 increase on to the consumer and see a large reduction in sales - meaning that he makes much less.
Or
Pass on only part of the increase, getting less in profit per sale, but seeing a much smaller drop in sales.
Simply put, he must choose between:
$2 Profit = $7 price - $5 cost - but few sales
or
$1 Profit = $6 price - $5 cost - with larger sales.
No where in there is there a loss. Simply less profit per book.