Fixed book pricing

Overview
The practice of "fixed book pricing" (FBP) emerged in the 19th century, alongside the growth of the book industry in many of the more developed economies across the world. Minimum retail book prices, or "price floors," were fixed, initially by industry agreement between sellers and publishers associations in order to limit the threat to higher quality, more culturally important, books which were seen to be posed by increasingly powerful sellers/suppliers of, more popular, "blockbusters," aimed at the mass market.

The economic argument was based on the understanding that market forces would favor more cost-efficient, larger volume, faster production of cheaper, inferior content and the sale of popular, generally lower quality, books at discounted retail prices. This would increasingly limit the ability of smaller sellers, serving niche/specialist markets to cross-subsidize their higher investment costs with revenues from books appealing to larger markets.

Source

 * E-books: Developments and Policy Considerations, at 46-47.