The comments section finally broke through my dense thinking by explaining why you only look to marginal cost.<p><a href="http://business.theatlantic.com/2010/02/amazon_vs_publishers_and_apple_what_should_e-book_prices_look_like.php#comment-381507" rel="nofollow">http://business.theatlantic.com/2010/02/amazon_vs_publishers...</a>