Paper doesn't cost very much and the vast majority of a publisher's costs come from expenses that still exist in an e-book world. From @cnet

There's a perception among consumers that an e-book should cost very little or next to nothing because there is no paper, printing, and shipping involved.
But in fact, for a new best-selling hardcover, all of the costs associated with print, from the printing to the shipping to the distribution to the warehousing to returns, amount to a mere few dollars per copy, depending on the size of the print run.
The vast majority of a publisher's costs come from expenses that still exist in an e-book world: Author advances, design, marketing, publicity, office space, and staff.
You can therefore imagine the fear that e-book prices instill in publishing executives' hearts. They're only saving a few dollars per copy in the switch to the e-book world, but the prices of books were slashed more than half: from $24.99 to $9.99 and even lower.
That begins to explain why publishers are trying to keep e-book prices high. But it doesn't tell the whole story.

Read more here...http://wtr.mn/HB3rrc