Economics 101 - ebook edition

Found this NYT article through Marginal Revolution.  Here is the relevant quote:

“The sense of entitlement of the American consumer is absolutely astonishing,” said Douglas Preston, whose novel “Impact” reached as high as No. 4 on The New York Times’s hardcover fiction best-seller list earlier this month. “It’s the Wal-Mart mentality, which in my view is very unhealthy for our country. It’s this notion of not wanting to pay the real price of something.”

In which Mr. Preston confuses price with cost.
Listen.  It "costs" the book publishers a certain amount of money to create, in this case, a physical book called "Impact".  That cost includes royalties to the author and salaries to the various employees who do editing, copyediting, proofing, art design, marketing, and production among many others.  Also included in that cost are charges for paper and ink.  We won't even get into pro-rated portions of property, plant, and equipment.  Add up everything that goes into creating, publishing, and distributing the work of fiction called "Impact".  That, Mr. Preston, is the publisher's "cost".
Then there is the middle man: Barnes and Noble, Amazon, your local book shop.  That book shop has certain expenses it must cover also, and therefore must sell the book at some dollar amount over and above what they paid for it.  This is called the retail profit.
Price, on the other hand, is what a willing buyer (me, the book reader) will pay to a willing seller (Amazon) in exchange for a good or service, in this case, your book.  That is the "real price".  The willing seller must make a profit.  The willing buyer must get something of value for the money exchanged.  If the bookseller cannot make a profit, they can either reduce their costs, or in the long run, go out of business.  If the buyer (me, the book reader) does not feel like he would receive enough value for the price the seller is charging, the buyer will not purchase the good or service - or he will purchase the good or service from a competitor of the book shop.
On a more macro level, and in a competitive marketplace (in which booksellers and publishers operate), the ultimate price of the book is determined by supply and demand, which changes over time.  The "Wal-Mart mentality" that you so decry is the economic theory of supply and demand playing out, and applying downward pressure on book prices.

The great thing about the capitalist marketplace is, if you don't like it, or if you can't make enough profit you can either find a different (more cost-effective) way of doing business or you leave the industry altogether.