That's what basic economics theory says, yes, but not what happens in practice to make Arizona Iced Tea $0.99. Nor why a baggie of 5 screws at Lowes costs $2.99

That's what basic economics theory says, yes, but not what happens in practice to make Arizona Iced Tea $0.99. Nor why a baggie of 5 screws at Lowes costs $2.99. Supplier costs are important in commodities, especially where easily compared alternatives are readily available, but that's not true of all products. There are a lot of factors that go into pricing, but for many consumer goods the vendor is able to set prices pretty much independently of the costs.