Why are most books in the LDS market larger and more expensive than mass market paperbacks? Why are fiction titles by certain well-known authors published in hardback and sold for $25, while other authors' works are published in paperback and sold for $15 or less? Why should I spend $25 for a book that I will read once, when I can buy something for much less that I will enjoy just as much? If LDS publishers sold mass-market size paperbacks at a lower price, I would be more inclined to buy them instead of borrowing them from the library or my sister-in-law, finding a used copy, or waiting until the overpriced hardback copy hits the bargain shelf and I can buy it for $4.99 or less.
"Mass-market" is the key to this question. Mass-market paperbacks are printed in massive quantities on a web press and on newsprint paper. The LDS market isn't massive. Most LDS fiction books start with a printing of around 2,000. At those quantities, it costs us the same amount to print a typical mass market size book as it does to print the larger trade paperback book (6x9; better paper). Since we have to charge the higher price for the books anyway, we might as well give our customers a little better quality so they don't feel so bad shelling out the extra money.
The decision to print the book in hardback or paperback is based on how many copies the publisher thinks they will be able to sell and if they think readers will want to keep it and re-read it. Historical LDS series fiction is more likely to go hardback. Romances, mysteries, YA and children's books are more likely to be in paperback.
Actually, LDS pricing on trade paperbacks and hardbacks are pretty competitive with national releases. National trade paperbacks range from $9 to $14, and national hardbacks from $19-$25 or more.
I'm not one to say you should buy an LDS book just to "support the industry." Yes, I'd love people to buy our books but only if those books have value to the reader. You, as the reader, have to decide if a particular book is worth the price the publisher/bookstore is asking. If it is, buy it. If it isn't, borrow it.