So for example I might I have 500g bottle of iced tea that’s $2.80 but then there’s a 1L version that’s $3.00
Why is that?
In: 1
Let’s say iced tea costs the company 10 cents per L to produce.
* If you buy 500 mL for $2.80, the company makes $2.75 profit
* If you buy 1L for $3.00, the company makes $2.90 profit
So you feel like you’re getting a good deal, and the company turns more of your money into their profit, *even after accounting for having to make more product*.
TLDR: Bulk pricing encourages consumers to buy more, which makes the company a bigger profit.
(Yes I know I’m ignoring packaging costs and stuff. frodeem’s answer covers these economy-of-scale considerations very well)
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