Question

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

Through non-price competition

Step-by-step solution

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.

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.