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

question 9

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.

---

Definitions:

Software Company

A business entity that specializes in developing, distributing, and maintaining software applications or systems.

Financial Account

A component of the balance of payments that records transactions involving financial assets and liabilities between residents of one country and the rest of the world.

Current Account

An element of a nation's financial transactions with the world that records the trading of goods and services, net profit from investments, and payments transferred.

Foreign Exchange Rates

The price of one currency in terms of another, determining how much of one currency can be exchanged for another in the foreign exchange market.