Back in October, Mark Coker, Smashwords founder, opined on The Huffington Post that

The day has come for publishers to offer a $4.00 book. Most books are too expensive. Compared to lower cost alternative media sources, books are becoming niche consumables like caviar.

He makes a good argument for expanding the reader base by offering books at $4 rather than $25 although he skips over the cost of digital readers.

Today, I lowered the price of Molokai Reef e-book edition to $3.95 at Smashwords.  On Twitter, Facebook, etc. I announced the price drop as a solstice (arrives 0545 UTC 21 Dec.) holiday event but I can't see raising it in the future.