Realistic and historically accurate:

Pepsi starts collecting the extra profits with zero price reductions.

fc417fc802 a day ago | parent | next [-]

In a duopoly, probably yes. However in a more competitive environment where several incumbents have achieved a given optimization a race to the bottom is likely to occur because it only takes one of them preferring to increase their relative market share to kick the process off.

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SoftTalker a day ago | parent [-]

The cola market is effectively a duopoly.

	▲	eru a day ago \| parent [-]
		Barriers to entry ain't exactly high.

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SoftTalker a day ago | parent | prev [-]

sacrificing even more profits that may be had by undercutting coca-cola's price? The CEO would be fired.

	▲	DangitBobby a day ago \| parent \| next [-]
		Markets generally don't follow Econ 101. There are effects beyond first order when it comes to pricing.
	▲	pdimitar a day ago \| parent \| prev [-]
		Really depends on the concrete numbers and the projections. You could be right, I could be right, I am only saying what I've witnessed historically in general. Greed trumps a lot of other fairly rational courses of action.