ACCA Applied Knowledge · Business and Technology · Technological factors
A publisher moves its textbooks from print to e-books sold directly through its own website. Which of the following is a likely effect on its products and cost structure?
Moving to e-books cuts distribution and inventory costs because each extra copy can be delivered instantly at almost no marginal cost. Production cost per additional copy does not rise, and copyright protection remains vital since digital files are easy to copy.
- ADistribution and inventory costs fall because copies can be delivered instantly at negligible marginal costCorrect
- BProduction costs rise sharply for every additional copy sold
- CThe publisher no longer needs to consider copyright protection
Explanation
Digital copies cost almost nothing to reproduce and deliver, so printing, warehousing and distribution costs fall. The marginal cost of an extra copy is negligible, not sharply higher. Digital products are easier to copy illegally, so copyright protection becomes more, not less, important.
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