A quantity surcharge occurs when a larger package costs more per unit than a smaller one. Although counterintuitive, such surcharges are common in supermarket pricing. Using manually collected price data from 1,491 product-type–store observations across 38 New Zealand supermarkets, we document their prevalence and distribution. Quantity surcharges affect roughly one in four products, a rate comparable to international evidence. Contrary to our initial expectation, they appear less prevalent in rich neighbourhoods. They also vary sharply across product categories.
Banerjee et al. (Thu,) studied this question.