This is a question I've been asked by many of my readers. I thought the answer should be obvious, but that may be because I'm immersed in the topic. And of course, we're addressing mainly the issue of indie authors. Traditional publishers continue to charge high e-book prices that cannot be justified, in my opinion, by their costs of publication.
Let me explain. When a self-published author sells a paperback book through Amazon, Barnes and Noble, etc., there are all sorts of expenses that must be met right off the top. The printer must be paid for printing the book. The retailer must be paid for featuring and distributing the book. The shipper must be paid for shipping the book. And royalties must be split with some of these partners.
On the other hand when an e-book is published, there is no cost for hard copy printing, and no cost for shipping. All that remains is the on-line retailer and the author to split the royalties. In many cases, an author can actually receive a larger reward from selling an e-book at, say, $4.99, than from selling a print book at, for example, $12.
Of course, when a traditional publisher sells either a print book or e-book, its expenses of doing business plus a profit margin, must be added to the cost the reader pays, or the author's royalty must be further diminished. The theory is that this author will make it up on the volume of sales. This is becoming less and less true as e-book publishing continues to outpace print book sales.
The above is a somewhat simplified analysis, but I hope it will help with an understanding of this issue. This marketplace will continue to evolve and change as will the technology of publishing.
Robert Tell, Author