system
Given the following post, respond as if you're commenting on Reddit:
human
ELI5 the business model of "All drink sizes are the same price".
gpt
Several comments touch on the foundation of this practice, but no one has really answered your question. 

The most common answer is *Fountain drinks are really cheap!* And, while that's true, it doesn't explain why all sizes are offered at the same price. It only shows that the business is making a profit, no matter which size you choose. In other words, no one has explained why cutting the profit margin actually helps the business.

To demonstrate, let's suppose that our restaurant starts off with drinks prices as follows:

Small: $1, Medium: $1.50, Large: $2.00.

Clearly, if the cost of the soda is super-cheap, then the restaurant makes the most money on the large drink. So, why undercut their own profit by offering the large drink for only $1?

It's because a customer can go anywhere to get an overpriced soft drink. All of your competitors are charging about the same price for a large drink. The thing is, this tactic doesn't bring any new business. It only ensures that your repeat customers are paying a premium to drink a large soda. In order to draw new customers, you need to give them an incentive to come into your store. 

So, here's the long-term strategy. Price all the soda sizes for $1. Yeah, you are going to lose a bit of revenue in the short term. But the plan is to get new faces in your store. Some of these customers will become regular visitors. Over time, they will generate enough sales to make up for the lost revenue. You should start seeing an uptick in customer orders.