Economic theory says that, in a perfect market[^1], the price of goods will fall to the marginal cost of the goods.

App stores are an example of (almost) perfect markets, so we should see the cost of apps fall to the marginal cost, which is effectively zero. And that is what we see.

The problem is that, although the cost to produce each additional copy of an app (i.e. its marginal cost) is effectively zero, the cost to produce the *first* copy of an app is actually quite expensive[^2]. There are also real costs associated with marketing, maintaining the app (fixing bugs, etc), adding additional features, and doing upgrades. Some apps also have ongoing server-side costs. The producer of the app has to recover those costs somehow.

This has become a huge problem in the industry.

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[^1]: A market where buyers and sellers all have good information about price, quality, etc

[^2]: Typically, the cost of developing an app starts at about USD$50,000, and can go significantly higher.

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