People always think that e-books should be cheap because they don't have the physical costs associated with paper books--but really, how high are the actual physical costs of paper books?

Doing some back of the envelope estimates I can't see how the marginal cost of a book could be over a couple dollars or so for the typical novel or mass market non-fiction book, including shipping it to the bookseller. Add in some more for the costs of storage of the physical book while it is waiting to be sold, and the costs of handling at the seller--and I still can't see it going over a few dollars.

Thus, I don't see why it would be surprising for publishers that sell a hardback for $20 to expect to sell an e-book for $15 or so.

Of course, it is possible that if they sold e-books for a lot less, it would so greatly expand the market that they would come out ahead overall. However, I don't think that is likely--I don't think most people's amount of reading is determined by the price of books.