How do you suppose that when soft drink sellers introduced cans containing 7.5 ounces of soft drink to sell alongside traditional 12-ounce cans, they managed to offer the soft drinks in the smaller cans at prices that were several cents higher per ounce of soft drink?

Short Answer

Expert verified

Through non-price competition

Step by step solution

01

Step1. Given information

Soft drink sellers introduced cans containing sold 7.5 ounces of soft drink simultaneously with the traditional 12-ounce cans. They sold the drink at a cost/drink higher in the small cans than in big ones.

02

Step2. Explanation

This can be achieved through non-price competition. It is not necessary to compete on the basis of who-sells-what-at-lower-prices. Customers can also be attracted through brand building, marketing, attractive packaging, giving out offers, etc. All these strategies together comprise of the non-price competition, as in not reducing the prices to increase sales but offering more services than the competition.

All this, can lead to soft drink sellers managing to offer the soft drinks in the smaller cans at prices that were several cents higher per ounce of soft drink.

Unlock Step-by-Step Solutions & Ace Your Exams!

  • Full Textbook Solutions

    Get detailed explanations and key concepts

  • Unlimited Al creation

    Al flashcards, explanations, exams and more...

  • Ads-free access

    To over 500 millions flashcards

  • Money-back guarantee

    We refund you if you fail your exam.

Over 30 million students worldwide already upgrade their learning with Vaia!

One App. One Place for Learning.

All the tools & learning materials you need for study success - in one app.

Get started for free

Most popular questions from this chapter

Consider Figure 4-3.Suppose that the government

reduces the ceiling price to\(500 per unit.Would

the shortage at the\)500-per-unit ceiling price be

greater than at the$600-per-unit price ceiling?

How might California cities alternatively have developed a rationing-by-queues approach using the internet?

In 2016,the government ofanation establisheda

price support for wheat.The government's sup

port price has been above the equilibrium price

each year since,and the government has pur

chased all wheat over and above the amounts that

consumers have bought at the support price.

Every year since 2016,there has been an increase

in the number of wheat producers in the market.

No other factors affecting the market for wheat

have changed.Predict what has happened every

year since 2016,to each of the following:

a.Amount of wheat supplied by wheat producers

b.Amount of wheat demanded by all wheat con

sumers

c.Amount of wheat purchased by the government

Suppose that Figure 4-5 applies to the labor market in

the state of Ohio,in whichW,is the minimum wage

established by the federal government,andQ,-Qa

therefore is Ohio's excess quantity of labor supplied as

aresult of the federal wage minimum.What would

happen to Ohio's excess quantity of labor supplied if

the state were to decide to establish its own minimum

wage atalevel above the federal minimum?

In recent years,the government of Pakistan has

establishedasupport price for wheat of about

$0.20 per kilogram of wheat.At this price,con

sumers are willing to purchase 10 billion kilo

grams of wheat per year,while Pakistani farmers

are willing to grow and harvest 18 billion kilo

grams of wheat per year.The government pur

chases and stores all surplus wheat.

a.What are annual consumer expenditures on the

Pakistani wheat crop?

b.What are annual government expenditures on

the Pakistani wheat crop?

c.How much,in total,do Pakistani wheat farmers

receive for the wheat they produce?

See all solutions

What do you think about this solution?

We value your feedback to improve our textbook solutions.

Study anywhere. Anytime. Across all devices.

Sign-up for free