A couple of people have asked why my (simple, small) app costs $2, instead of $1 or free. The answer is pretty simple. I’m charging at all because I can, and I’m charging $2 instead of $1 because for the customer, the difference between those two prices is tiny enough to justify doubling revenue.
Interesting theory, but I guess everyone is different. I will buy pretty much any app I am remotely interested in for $0.99. For $1.99, I have to have more than a remote interest, and confidence that it’s worthwhile, most likely based on word of mouth. Anything more than that and I have to be seriously convinced I want it.