Reply to post: Elasticity of Demmand

Well, what d'you know: Raising e-book prices doesn't raise sales

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Boffin

Elasticity of Demmand

I remember this from lectures long ago.

The problem is, what is the ratio and sometimes in which direction.

If you drop your prices 10% and get a 5% rise in sales, you are in trouble. If you drop your prices 10% and get an 11% rise, you are doing well.

Some things however, if you drop your prices, your sales will fall. For example, Rolls Royces and Ferraris could have this counterintuitive property. If the Rolls is seen to become cheaper, it may be perceived as moving down market and some people may get Aston Martins instead.

There will always be a market for "nice" books. Big beautiful things to put on your coffee table or present as prizes and mementoes. eBooks are not this. There is zero marginal cost to the maker and there is generally zero emotional attachment to the file.

So the latest SpyNovel by X has gone up? I'll get the one by Y for 15p less. Maybe, I'll get Xs book next week when they have dropped the price again. If they don't, there is always Z.

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