Same APK for free and paid versions on Android Market?

Question

Is it possible to list in Google's Android Market a single APK for both free and paid versions?

So far, I only found this tip to create a button in the free version that links to the paid versions, but IIUC these are still 2 separate APKs.

I also found a reference to creating free/paid versions from same code, but that still refers to 2 separate APKs.

What I am interested in is an (Google) Android Market way to provide functionality that is similar to PayPal's MPL (i.e. one app does it all). Is this possible?

EDIT: Based on the answer below, it seems that Google's In-App Billing facilitates this.

However, LVL's Requirements and limitations says:

Licensing is currently for paid apps only, since free apps are considered licensed for all users. If your application is already published as free, you won't be able to upload a new version that uses licensing.

I know that LVL is not the same as In-App Billing but LVL is definitely required for In-App Billing to work (if only for using the key). So how does this reconcile?

Answer 1

It's possible to use something known as in app products. The min API is 1.6, which should work plenty well. Basically, anyone could download the code, but some unlocking of features could be done if desired to buy new functionality. They also have sample code which shows how it works.

Alternatively, you could use the licensing API, and simply check to see if your app is licensed. This would require a different package name, however, as all apps do.