Although It Is a Popular Product, Apple Makes Little Profit

Multiple Choice

Although it is a popular product, Apple makes little profit from each song downloaded through iTunes. Why does Apple charge only US$0.99 to download a song?

A) The low price makes it more likely that consumers will buy iPods, which are relatively expensive.
B) Apple cannot raise the price above US$0.99 per song because consumers can download songs at even lower prices from Apple's competitors.
C) Although Apple makes a small amount of profit per song, total profit is large because the quantity sold is large.
D) Apple plans to increase the price of downloading songs after it sells a large enough number of iPods.