And if, as is true for some titles, your ebook sales make up half of your totalsales, slashing prices whilst also having your sales cannibalised by secondhand sellers could be a painful and possibly fatal experience.
You could try to increase totalsales by lowering prices, but if you face a downward sloping demand curve then maximum profits will always occur at a lower production level than maximum revenue.
Huge contract manufacturers like Flextronics and Solectron are buying more parts directly from suppliers, cutting out distributors, while prices for chips (half of Arrow's totalsales) drop 30% annually.