The Law of One Price

I arrived at the University of Chicago 2 months ago and since then, I’ve been sustained through numerous late night study sessions by the caffeine in Diet Coke.

The product is available in many packages to suit the tastes of different consumers. These include 12 oz aluminum cans, 20 oz plastic bottles, and the 2-liter bottles which I prefer. They are also bundled differently, for example, sold separately, as six packs, and 12 packs. The bundling and packaging of the product affects the price per ounce and therefore, the set of Diet Coke products are not entirely homogeneous.

The 2-Liter Plastic Bottles of Diet Coke which I buy, one at a time, however, are an example of a standardized product available in numerous shops in the University of Chicago area. It is a homogeneous good such that all the bottles are in exactly the same package, are the of the same brand, have the same content, and are therefore perfect (1 to 1) substitutes of each other.
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