Two Soft Drinks Sit Side-By-Side in a Grocery Store: a Six-Pack

Two soft drinks sit side-by-side in a grocery store: A six-pack of Coca-Cola (a brand name) sells for $3.00,while a six-pack of Uncle Don's cola (not a brand name) sells for $1.50.In a typical day the store sells some of each type of cola,which suggests that

A) no rational consumer would spend twice as much for Coca-Cola as he would for Uncle Don's cola.
B) some consumers must perceive that Coca-Cola is a higher quality product.
C) Coca-Cola has no incentive to maintain the quality of its product just because of the Coca-Cola brand name.
D) None of the above is correct.

Correct Answer:

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