Mass market paperbacks used to be called pocket books, partly because they would presumably fit in a pocket, and mostly because the first major firm to introduce them in the U.S. was - Pocket Books (1939).
Yes, mass market paperbacks are really, really cheap to make. They first sold for 25 cents no matter who made them. The author got one penny in royalties for each copy sold. A million-selling book earned an author $10,000. Good thing life was a lot cheaper in those days.
To cut costs - and to keep the flimsy bindings from cracking - longer books were often abridged. Finally, in the early 1950s, extra-length editions at 35 cents or even 50 cents were introduced to accommodate full-length texts.
Mass market remained the main format for paperbacks well into the 1970s and even 1980s. This was great because you could get virtually every book that came out in hardcover for very little money.
But mass market paperbacks were for the most part not sold in regular bookstores, and were not processed via the same networks as hardbacks. You have to remember that in those days there were hardly any chain bookstores. Cities had a few “good” bookstores, with selections that were extremely limited by today’s standards. Mass market paperbacks instead were moved by local distributors in each city to hundreds of drugstores, newsstands, and similar establishments.
Two things happened, more or less simultaneously: the small outlets for paperbacks realized that they weren’t getting much profit on paperbacks and chain bookstores began springing up all over the country.
(Some national distributor that fed the local ones may also have gone out of business. This acertainly happened in the world of comics, which along with the low profit margins is why comics moved out of drugstores and into specialty stores.)
The reduced number of locations for mass market books meant that prices had to go up to retain the same level of profit. The 50 cent paperback I bought in college is $6.99 or $7.99 today, an increase much greater than inflation. And fewer outlets meant that fewer titles could be published. Almost instantaneously, all non-fiction disappeared from the mass market.
But there still had to be a cheaper way than hardbacks - whose prices were also increasing faster than inflation - to sell mass quantities of books.
A few publishers began experimenting with prestige lines of trade paperbacks. These books were printed off the same printing plates as the hardback editions, and looked exactly like the hardback edition in every way except for the paper covers. So they were relatively quite inexpensive to produce - all the costs of producing a book had already been met. But because they were a prestige item, the publisher could still charge a fairly high price. And the new chain bookstores - not tied to paperback racks of fixed size - were eager to get these titles. They brought customers into the store, whereas a lengthy non-fiction tome brought very few extra people into a drugstore.
And it worked. Publishers traded off mass sales for higher profit margins; customers liked the feel of the trade paperbacks - same size as the old familiar hardback but lighter and easier to hold; authors got a higher royalty off these books - and more prestige, since mass market paperbacks never quite got over the sting of the lurid 1950s covers and the association with genre fiction, which along with bestsellers accounts for almost all mass market paperbacks today. Everybody seemed to win.
Except people like me who find the mass market size easier to hold and deal with, and much easier on the wallet.