This is an interesting and definitely non-trivial economic issue. What we're presented with it the classic supply and demand pricing problem, with some fun complications.<p>I'm assuming a horizontal supply curve (and marginal cost approaching zero), which implies that pricing comes down to substitutability and demand.<p>The pricing strategy in the article implies that to break into the top 10, your app has to be priced at $.99. To me this suggests that quality apps are perfect substitutes, and are selling at as close to marginal cost as possible. Once you fall out of the top 10, however, the competition is more monopolistic, and you can raise your price such that you sell the quantity where marginal cost equals marginal revenue.<p>This seems backwards to a traditional market, where the competition is more monopolistic in the higher quality products, and more perfectly comptative in the lower quality products. <i>Interesting</i>.