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CMA Final · Entrepreneurship and Startup · Value Addition

A startup sells a basic accounting app for free and earns revenue only from premium analytics, payment integrations and training modules bought by some users. This revenue approach is best described as:

This is a freemium model. The basic app is given free to build a user base, while revenue comes from value-added paid layers such as premium analytics, payment integrations and training. It is not cost-plus pricing, franchising or a liquidation sale.

  1. Aa freemium model with value-added paid layersCorrect
  2. Ba cost-plus pricing model
  3. Ca franchise licensing model
  4. Da liquidation sale of surplus stock

Explanation

Offering a free base product and charging for enhanced features, integrations and services is the freemium model. Cost-plus sets price from cost, franchising licenses the business format, and liquidation is unrelated.

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