Problem solved in full
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Two jars of the same coffee at 200 g or 300 g 7 steps
Two jars of the same coffee: 200 g at 4.50, or 300 g at 6.30 with 20% extra free on top. Which is cheaper per gram, and by how much?
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Take the plain jar first. One division, and the answer is a price per gram.
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The second jar needs its size fixing before anything else. Twenty per cent extra free on 300 g is 360 g, and the price does not change.
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Now the same division on the real quantity.
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The bigger jar wins, at 1.75 per 100 g against 2.25. That is a saving of 22.2% per gram, and it is worth noticing that the 20% extra free did not deliver a 20% saving on its own.
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Separate the two effects. Without the offer, 300 g at 6.30 is 2.10 per 100 g, already 6.7% cheaper than the small jar. The extra free then takes that 2.10 down to 1.75.
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And that step is the one the label overstates. Twenty per cent extra free is a saving of 20/120, which is 16.7%, not 20%.
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Which leaves the question the arithmetic cannot answer. The cheaper jar is only cheaper if you drink 360 g of coffee before it goes stale, and a saving on quantity you will not use is not a saving. Unit price ranks what is on the shelf; it says nothing about what is in your cupboard in three months.
Answer
The 360 g jar, at 1.75 per 100 g against 2.25 โ a saving of 22.2% per gram. Of that, 6.7% comes from the larger size and the rest from the offer, which is worth 16.7% rather than the 20% on the label.
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References (2)
- The quantity surcharge measured in real shops, rather than asserted: S. Clerides and P. Courty, "Sales, Quantity Surcharge, and Consumer Inattention." The Review of Economics and Statistics 99(2), 357โ370, 2017.
- How common it is, and how large, once shopping moved online: H. Estelami, "Incidence and Magnitude of Quantity Surcharges and Quantity Discounts in Online Shopping." Journal of Consumer Affairs 52(3), 517โ539, 2018.