As we all know by now, the price of our college textbooks is a significant part of our schooling costs and seems to have gotten worse even in the last 5 years. Although I have since resorted to other channels of distribution, I was always completely shocked as a freshman and sophomore when the bookstore cashier announced my total. No offense to textbook authors, but how in the world are the publishers charging me $200 for a book that will be obsolete in one year, or even one semester. Even if production costs have risen significantly, this alone would not account for the astronomical prices publishers are charging.
According to the article in Business Week titled, “Textbooks for Tightwads” the textbook publishing industry is an Oligopoly, with 5 major publishers running the show. There might not be outright collusion between the companies, but their objectives are no mystery. Because there is a defined market that requires a unique product, the publishers can introduce higher prices and have little or no consequences when it comes to market share or revenue.
I’m sure I’m not the only one who gets frustrated when I see brand new textbooks on the shelves wrapped in cellophane with a “CD-ROM” that I know I’ll never use. With a few publishers controlling the market, they also have the ability to offer “bundled” products at higher costs, even if consumers would prefer the products separately.
When an oligopoly controls an industry, the consumers receive less surplus, if any; and the producers are motivated by profit, not by quality. Competition equalizes the market and promotes a free-market economy where producers are motivated to make their products better and where consumers are driven to find the best deal.