Assume that the cost of producing a hardback book is roughly equivalent to producing a paperback book. Explain how and why then do publishing companies charge higher prices for the hardback book and a much lower price for the paperback book.

Question

Quizplus · Accepted Answer

The Answer is The hardbound book version typically comes out before the paper bound version is made available. Consumers who have a higher ability and willingness to pay and an aversion to waiting will pay a higher amount of the hardbound version. Those who have a lower ability to pay and a willingness to wait will delay purchase of the book until the paperback version comes out.

Assume That the Cost of Producing a Hardback Book Is