When you develop a new app you make both versions: Free and Paid?

Really depends on the app. Is it something you would want to buy? Or is there perfectly good free alternatives? 
App market is highly competitive

Interested in some kind of app monetization. You have developed new application and you make both versions, the full one for 2.99$ for example and the free one with the ads and some restrictions. Is that a right way or you prefer to make a demo version and then provide a paid one in full function?
This topic first appeared in the Spiceworks Community

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