The College Textbook Price Predicament
The College Textbook Price Predicament
New college textbooks can easily cost 200 dollars, some even as much as 400(Senack, 4). Reports indicate that the price of textbooks have risen at twice the rate of inflation over the last twenty years (Emrey-Arras, 10). According to an article from Targeted News Service, college students are spending on average $1,200 a year on books and supplies. College textbooks are assigned to students to buy by professors teaching a course, making them mandatory course supplies. Students who cannot afford these textbooks are forced to find workarounds, some even choosing to not buy one at all. College textbook prices are rising due to its unique market, and they can be lowered through restoring market forces.
When …show more content…
The college textbook had been in general an inelastic good, because purchases could not be delayed, and there were no substitutes available. However, recent studies show that textbooks are becoming more elastic because of new substitute goods which were previously unavailable (Koch, 11). These substitute goods include used textbooks, rental, as well as e-books or illegal uploads. To compensate for the subsequent drop in consumers, textbook publishers claim that they are forced to drive up prices. A trend associated with this problem is how the price of a new textbook drops after the first school semester after publication. Many students try to get back some of the money spent on textbooks by selling them used, offering them at a lower price. The result of this is that publishers put high prices on the newest editions to make up for money lost to substitute goods. This situation shows the beginnings of what would happen if competition was restored to the textbook market. If there are enough substitutes that are accessible to all, the textbook publishers will be forced to stop artificially stop inflating prices. Textbook publishers may want to branch out into other, cheaper mediums for their products, to lower the cost of the book …show more content…
The retail market is also an oligopoly, with four wholesalers dominating the whole market (Koch, 6). Because of this, market forces have less of an effect on the textbook market, since the select few businesses can manipulate prices as they wish. The reason behind the lack of producers is the fact that successful textbook publishers need a good reputation, and access to capital. While this problem is harder to combat, it may be possible to allow new textbook publishers to give their sales pitch directly to the consumers. If they do so, then publishers will finally be forced to compete on price among themselves, but it is slightly unrealistic considering the situation. Again, the uniqueness of the situation where the professor has to be the agent makes this solution highly
New college textbooks can easily cost 200 dollars, some even as much as 400(Senack, 4). Reports indicate that the price of textbooks have risen at twice the rate of inflation over the last twenty years (Emrey-Arras, 10). According to an article from Targeted News Service, college students are spending on average $1,200 a year on books and supplies. College textbooks are assigned to students to buy by professors teaching a course, making them mandatory course supplies. Students who cannot afford these textbooks are forced to find workarounds, some even choosing to not buy one at all. College textbook prices are rising due to its unique market, and they can be lowered through restoring market forces.
When …show more content…
The college textbook had been in general an inelastic good, because purchases could not be delayed, and there were no substitutes available. However, recent studies show that textbooks are becoming more elastic because of new substitute goods which were previously unavailable (Koch, 11). These substitute goods include used textbooks, rental, as well as e-books or illegal uploads. To compensate for the subsequent drop in consumers, textbook publishers claim that they are forced to drive up prices. A trend associated with this problem is how the price of a new textbook drops after the first school semester after publication. Many students try to get back some of the money spent on textbooks by selling them used, offering them at a lower price. The result of this is that publishers put high prices on the newest editions to make up for money lost to substitute goods. This situation shows the beginnings of what would happen if competition was restored to the textbook market. If there are enough substitutes that are accessible to all, the textbook publishers will be forced to stop artificially stop inflating prices. Textbook publishers may want to branch out into other, cheaper mediums for their products, to lower the cost of the book …show more content…
The retail market is also an oligopoly, with four wholesalers dominating the whole market (Koch, 6). Because of this, market forces have less of an effect on the textbook market, since the select few businesses can manipulate prices as they wish. The reason behind the lack of producers is the fact that successful textbook publishers need a good reputation, and access to capital. While this problem is harder to combat, it may be possible to allow new textbook publishers to give their sales pitch directly to the consumers. If they do so, then publishers will finally be forced to compete on price among themselves, but it is slightly unrealistic considering the situation. Again, the uniqueness of the situation where the professor has to be the agent makes this solution highly