The company is offering a promotion where customers can buy two bottles of soda and get one free. If a customer purchases 4 bottles, they pay for 4 bottles but receive an additional bottle for free, according to the promotion.
Here's the breakdown:
- The customer purchases 4 bottles.
- Since they can take advantage of the "Buy two, get one free" offer, they pay for 4 bottles but only receive 3 as part of the deal (they receive one free with the purchase of 4).
- Therefore, out of the 4 bottles purchased, only 3 are charged under the promotion, resulting in 1 bottle being given away for free.
Given that each bottle costs $2.00, the company loses the retail value of the free bottle:
1 free bottle at $2.00 = $2.00 loss in sales.
Thus, the company is forfeiting $2.00 in sales due to this transaction.