We know roughly what it costs to produce a print book, and we can point to the areas where eBooks are cheaper than paper editions (no dead trees and ink, for one thing; no warehousing or distribution for another) and more expensive (downloads, website maintenance, implementation of DRM). At the moment, eBooks generally sell at a slightly lower cost than print books, and we can expect to see the gap between eBook and print book prices increase even more as the popularity of eBooks increases.
Books used to be highly priced luxury items, until 1935 when Penguin started selling paperback versions of quality literature, at a price that matched that of a packet of cigarettes. By offering customers a cheaper, smaller and less expensive format, publishers expanded the available market for their books and enabled a larger number of readers to gain access to affordable reads.
Today, the growth in worldwide literacy has created a massive affordability gap between those who want books, and those who can afford them. eBooks hold the opportunity to expand the worldwide market for books, especially in developing countries.
