E-Books With the Explosive Growth of Electronic Book, or E-Book, Readers

question 66

Multiple Choice

E-Books
With the explosive growth of electronic book, or e-book, readers like Amazon's Kindle and Barnes & Noble's Nook and even smart phones like the iPhone and BlackBerry devices, book pricing is becoming a significant concern for book publishers. Digital book sales have grown exponentially from almost non-existent in 2002 to more than $120 million in 2009. While these sales are still small compared to industry sales, they are expected to grow even more in the coming years due to the plethora of e-book readers coming on the market. This creates a dilemma for publishers, though, because the average price of a hardcover book, which is the bread-and-butter of publishers' profits, is $27.00, whereas the price of an e-book is $9.99. To protect profits, some publishers, like Simon & Schuster, are delaying the electronic editions by four months. Other publishers are following suit, claiming consumers will not buy the hardcover at $27.00 if they can purchase it at a much lower price electronically.
-Refer to E-Books. If publishers decide to release e-books at the same time as the higher-priced hardcovers,book resellers will probably end up with a lot of unsold books in their stores. This will likely result in an increase in _____ demanded by the resellers because they will have to slash prices to sell the books.

• A) quantity discounts
• B) value-based pricing
• C) price discrimination
• D) push money
• E) markdown money

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Definitions:

Tolerance

The capacity to endure continued exposure to a substance or activity without adverse reaction, often leading to the need for increased amounts to achieve the same effect.

Physical Dependence

A physiological state of adaptation to a substance, resulting in withdrawal symptoms when that substance is reduced or stopped.

Nucleus Accumbens

A region in the brain involved in the reward circuit, associated with pleasure, reinforcement learning, addiction, and fear.

Reward Pathway

A neural pathway in the brain that is activated by rewarding stimuli, playing a critical role in the reinforcement and motivation processes.