I'd be curious to know how much the author makes on paper book sales. I'm sure it varies widely by author. I wonder if it's similar to the music industry. My understanding is that unless you're a superstar you only make $.50 to $1.00 USD on the sale of a cd that might sell for $13 - $17. The rest is used to pay studio costs, distribution, promotion, coaine for the music execs (did I say that?)
Taking that into account the most I ever paid for an ebook was $6 and that was for a public domain work! I was young and foolish and didn't know about gutenburg and blackmask ;-).
For me $5 would probably be the cap unless it's something I am just dying to read.
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