In August 2008, Ethan Nicholas Developed the IShoot Application for the Apple

question 109

Multiple Choice

In August 2008, Ethan Nicholas developed the iShoot application for the Apple iPhone 3G, and within five months had earned $800,000 from this program.By May 2009, Nicholas had dropped the price from $4.99 to $1.99 in an attempt to maintain sales.This example indicates that in a competitive market

• A)earning an economic profit in the long run is extremely easy.
• B)earning an economic profit in the long run is extremely difficult.
• C)it is impossible to earn an economic profit in either the short run or the long run.
• D)economic profits are only earned in the long run.

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Definitions:

Spot Bonuses

Immediate, unplanned rewards given to employees for exceptional performance or achievements.

Performance Standard

The expected level of performance that serves as a benchmark to evaluate an employee's job performance.

Incentive Payments

Financial rewards given to employees to encourage or reward them for achieving particular goals or performing at a superior level.

Entitlement

A right granted by law or contract, especially to financial benefits from the government.