eli5 why bottled water costs more than lemonade?

Question

I see lemonade on shelves costing half the price of bottled water. I imagine that a 10 per cent sugary solution is still 90 per cent water, but costs (some times) half as much.

In: Economics

Answer 1

Worth isn’t about what something costs to produce, it’s about what people are prepared to pay. Or even what people WANT to pay – if I try and offer the same thing for less, people MAY buy it – but equally, they may interpret my lower price as indicating that my product is of lower quality, and buy the “premium” brand instead. People aren’t always logical in their buying decisions.