Explain different prices for essentially the same product

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Reference no: EM133328069

Case Study: A book that sounds just perfect for me, Kate Raworth's Doughnut Economics is available on Amazon for $40.35 for the hardback and $15.99 for paperback. From the publisher's perspective, the difference in the cost between each version of the book seems negligible; it may cost a little bit more to produce the hard cover, but certainly not more than 2.5 times as much. Hardback versions usually also get published a few months before paperback versions are published.

Question a.) How do you explain the different prices for essentially the same product, given that the cost to the publisher of providing each type of book is basically the same?

Amazon also offers the Kindle digital e-book version for $11.87. The cost to Amazon to produce a new "copy" for the next consumer is virtually nothing; just the sending of some data to the customer's device.

Question b.) Why is Amazon able to charge $11.87 when its cost is basically zero and the market for books is likely very competitive?

Reference no: EM133328069

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