Freemium pricing

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This article describes a pricing strategy used by sellers, typically in markets that suffer from imperfect competition, significant transaction costs or imperfect information.
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Definition

Freemium pricing is a pricing strategy where two or more versions of a good or service are offered, one of which is completely free, and the others cost some money. The versions that cost money are supposed to have some additional features not available in the free version.

Rationales for freemium pricing